USD/JPY analysis: Wall Street put the pair in correction mode

Valeria Bednarik FXStreet

USD/JPY Current price: 108.59

Japanese encouraging data offset by BOJ Kuroda´s words.
USD/JPY lead by equities and yields ignores macroeconomic data.

The USD/JPY pair reached 109.19, its highest since early February, but trimmed all of its daily gains ahead of Wall Street close, as American equities took a turn for the worse. The pair reached such high as US Treasury yields held on to gains, with the 10-year note benchmark topping at 3.0%. Japan released the final version of the Coincident and Leading Indexes for February, with the first one resulting at 116.1, below market's expectations. The Leading Index resulted at 106.0, beating expectations of 105.8, but the good news from two-month ago were offset by recent comments from Governor Kuroda, who said this week that QE is here to stay. US positive data was not enough to keep the pair up. Japan will release its All Industry Activity Index for February during the upcoming Asian session, foreseen at 0.4% from a previous -1.8%. The pair, however, will likely continue reacting to equities and yields. The retracement put an end to a four-day winning streak. Ahead of the Asian opening, the 4 hours chart shows that, while the price is far above bullish moving averages, technical indicators have begun correcting extreme overbought conditions, not enough to confirm a steeper slide ahead, but surely leaning the scale to the downside.

Support levels: 108.55 108.20 107.90

Resistance levels: 108.85 109.20 106.60

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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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