USD/JPY analysis: unconvinced bulls at risk of giving up

Valeria Bednarik FXStreet

USD/JPY Current price: 112.54

Rising US Treasury yields kept the USD/JPY pair above 112.00.
Critical dynamic support at 111.65, the 100 DMA.

The USD/JPY pair continued trading within familiar levels Friday, finishing the week modestly up in the 112.50 price zone, as bond yields rose following the Fed's announcement to maintain the tightening path. The pair advanced at the end of the week on the back of easing fears, which saw most worldwide indexes moving off their lows, and despite soft US data. The yield on the benchmark 10-year Treasury note closed at 3.19%, while for the 2-year note it settled at 2.91%. Japan will open the macroeconomic week releasing the August All Industry Activity Index, foreseen up by 0.4% MoM following 0.0% in July.

The pair held at the lower end of the previous week's range and the daily chart shows that technical indicators are in negative ground, with the Momentum heading firmly lower within oversold levels and the RSI directionless around 49, skewing the risk to the downside. The same chart shows that the pair had found buyers around the 100 DMA, a key support for these upcoming days at around 111.65. In the 4 hours chart, the pair settled around the 200 SMA and below the 100 SMA, both directionless, while technical indicators stand in positive ground, the Momentum aiming north but the RSI directionless, all of which reflects the limited upward potential.

Support levels: 112.10 111.65 111.30

Resistance levels: 112.60 113.00 113.40

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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