USD/JPY: challenging weekly lows, more slides ahead

Valeria Bednarik FXStreet

USD/JPY Current price: 110.25

US Treasury yields at fresh over 1-year lows, dragging the USD/JPY lower.
Japanese inflation the missed market's expectations, US Markit indexes up next.

The USD/JPY pair resumed its decline after being rejected from a key resistance Thursday, now trading at fresh weekly lows in the 110.20 price zone. Asian indexes were up, but fell short of triggering gains in the pair, even despite poor Japanese data, as the National CPI was up by just 0.2% YoY in February, below the 0.3% expected. European indexes, on the other hand, are down amid discouraging local PMI, having a bearish effect on the pair, in line with the dominant trend. Furthermore, US Treasury yields extended their slump, with the benchmark yield for the 10-year note down to 2.47%, a level last seen in January 2018.

The US will release today February Existing home sales, expected to have surged by 2.2% MoM, although considering housing data already released, there's a good chance the number will disappoint. The March preliminary Markit PMI will also be out. The Manufacturing Index is expected at 53.6, while the Services one is foreseen at 56, both in line with February final readings. European data just released, however, hints a possible negative outcome there too.

The 4 hours chart shows that the pair retreated from its 200 SMA, at around 110.90, having attempted a couple of times to regain ground above it before finally plunging. Technical indicators in the mentioned chart have resumed their declines with the Momentum maintaining its downward slope at fresh monthly lows and the RSI currently at 28. Despite the oversold conditions, there are no signs that the pair could change course anytime soon. Rather, fresh lows below 110.00 are to be expected.

Support levels: 110.00 109.65 109.30

Resistance levels: 110.55 110.90 111.20

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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