USD/JPY Analysis: yen gains on renewed Brexit concerns

Valeria Bednarik FXStreet

USD/JPY Current Price: 108.49

Brexit-related fears spurred demand for safe-haven assets at the end of the day.
Japan’s macroeconomic calendar to remain empty this Wednesday.
USD/JPY ends the day in the red, but bears remain reluctant.

The USD/JPY pair has spent most the day lifeless around 108.60, finally reacting negatively to Brexit headlines. A holiday in Japan exacerbated the quietness around the pair, alongside Brexit-related uncertainty throughout the first half of the day. The pair remained afloat amid some modest dollar’s demand during London trading hours, also finding support in the positive performance of European and Asian equities, as most indexes closed in the green. As per government debt, US Treasury yields remained at the upper end of their weekly range but turned into the red after the UK Parliament voted against PM Johnson’s motion to accelerate the process, as the headline spurred demand for safe-haven assets, also dragging US stocks lower. There are no macroeconomic releases scheduled in Japan for this Wednesday, which means sentiment will lead the way.

USD/JPY short-term technical outlook

The USD/JPY pair has remained within familiar levels for a third consecutive day, although the daily chart shows that it reached a higher high of 108.72, indicating that bulls are not willing to give up. Despite the late decline, the pair has also set a higher low. In the shorter term, and according to the 4 hours chart, the pair offers a neutral-to-bearish stance, as it continues hovering around its 20 SMA, which currently gains downward traction. The Momentum indicator remains directionless around its mid-line, while the RSI gains bearish traction, currently at 46. The bearish potential will increase on a break below 108.28, the weekly low an immediate support.

Support levels: 108.25 108.00 107.75

Resistance levels: 108.65 109.00 109.35

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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