USD/JPY: bearish momentum accelerates

Valeria Bednarik FXStreet

USD/JPY Current price: 112.33

The Japanese yen came back with a vengeance, as poor US inflation and sales data sent yields sharply lower. The interest of US Treasury bonds were already down ahead of the news, as investors feared what they actually got, that is that the latest macroeconomic figures put further pressure on the Fed, limiting chances of another rate hike this year. US inflation remained flat in June, while retail sales fell by 0.2%, down for a second consecutive month. Seems hard the Fed can keep blaming lower inflation to temporal factors, as the slump in sales is clearly signaling slower consumption. The pair is strongly bearish in the short term, as in the 4 hours chart, technical indicators turned firmly lower after failing to overcome their mid-lines, with the price now below its 100 SMA, for the first time in a month. The pair bottomed at 112.26, with a break below it exposing the 111.80 region where the pair presents multiple intraday highs and lows for this last month. Below it, 111.20 is the next probable bearish target.

Support levels: 112.25 111.80 111.20

Resistance levels: 112.50 112.90 113.35

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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