USD/JPY Analysis: Uncertainty leads to a dull start to the week

Valeria Bednarik FXStreet

USD/JPY Current price: 108.60

Japanese adjusted trade deficit better than anticipated in September.
USD/JPY trading at the upper end of October’s range, lacking directional momentum.

The USD/JPY pair is trading at around 108.60, recovering from a daily low of 108.28 and modestly up for the day. The market’s sentiment fluctuated between pessimism and optimism amid weekend Brexit-related news, with risk-off taking over the weekly opening, although movements were limited beyond Pound crosses. The mood improved ahead of the London opening, which helped the pair recover within range. Still, uncertainty continues to rule the market.

The macroeconomic calendar has little relevant to offer today. During the Asian session, Japan published the September Merchandise Trade Balance, which posted a smaller-than-anticipated adjusted deficit of ¥-97.2B. In the same month, Imports declined by 1.5%, while exports slid 5.2%. The US has no data scheduled for release this Monday.

USD/JPY short-term technical outlook

The USD/JPY pair has bounced from around the 23.6% retracement of its latest rally, measured between 106.81 and 108.93. In the 4-hour chart, however, the pair offers a neutral-to-bearish technical stance, as it remains unable to recover above a flat 20 SMA, while indicators seesaw directionless around their midlines. Critical support is located at 108.00, the 38.2% retracement of the mentioned rally, with increased chances of a downward extension once below this last.

Support levels: 108.30 108.00 107.75

Resistance levels: 108.80 109.10 109.40

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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