USD/JPY analysis: waiting for a new catalyst
USD/JPY Current price: 112.66
Following an early slide down to 112.31, the USD/JPY pair recovered, to end the day unchanged from Friday's close in the 112.60 region. The Japanese yen gapped higher at the weekly opening, on headlines indicating that North Korea is preparing to test a long-range missile that could reach the US West Coast, although with Japan on holidays, the movement was short-lived. Furthermore, US Treasury yields held near recent highs, barely with the 10-year note yield ending the day barely lower at 2.36% from Friday's 2.37%. In the macroeconomic front, Japan will release its current account and trade balance data for August, both expected below July's levels, whilst BOJ's Governor Kuroda is scheduled to speak, although there are little chances that he would add something new to its monetary policy stance. The pair has been trading uneventfully ever since reaching the 113.00 region, confined to a tight consolidative range for more than two weeks already, after adding around 600 pips from its September bottom, waiting for a catalyst that will give it the next directional impulse. Short term, the pair presents a neutral-to-bullish stance, give that the price is holding above its moving averages, with the 100 SMA heading higher around 112.30, providing an immediate support, followed by 112.00, the 23.6% retracement of the September run. Technical indicators in the mentioned chart, however, continue lacking directional strength, holding around their mid-lines. The pair would need to advance beyond 113.45, the high set last week, to be able to extend its bullish run during the following sessions.
Support levels: 112.30 112.00 111.65
Resistance levels: 113.00 113.45 113.80
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.
