USD/JPY Forecast: Buyers defend 109.60 but with little conviction

Valeria Bednarik FXStreet

USD/JPY Current price: 109.71

The UK and the US celebrate holidays this Monday, keeping volumes limited.
Japanese data was mixed, although long-term measures were encouraging.
USD/JPY has a limited bearish potential despite easing from recent tops.

Major pairs consolidate in a quiet Monday, as the UK and the US celebrate different holidays which will maintain their respective markets closed. The USD/JPY pair eased modestly during Asian trading hours, currently trading around the 109.70 level. Asian and European shares trade mixed, failing to provide clear directional clues.

Data wise, Japanese data released at the beginning of the day was mixed. March Retail Trade was up 12% YoY, While Large Retailer Sales surged 15.5%. The preliminary estimate of April Industrial Production came in at 2.5% MoM, missing expectations, although the annual reading jumped to 15.4%. Finally, the March Consumer Confidence Index contracted to 34.1 against the expected advance to 35.3.

USD/JPY short-term technical outlook

The USD/JPY pair is finding buyers in the 109.60 price zone, although bounces are modest. Nevertheless, the risk remains skewed to the upside in the near-term. The 4-hour chart shows that the price remains above a bullish 20 SMA, which keeps advancing above the longer ones. Technical indicators have erased extreme overbought readings, with the Momentum resuming its advance within positive levels and the RSI consolidating around 57.

Support levels: 109.60 109.20 108.85

Resistance levels: 110.10 110.45 110.80

View Live Chart for the USD/JPY

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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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