USD/JPY Current Price: 107.64

  • The dollar advanced alongside Wall Street, sending USD/JPY to a fresh 3-week high.
  • Japan Industrial Production seen improving in May, but still within negative levels.
  • USD/JPY short-term bullish as long as above 107.50 a Fibonacci support level.

The USD/JPY soared to 107.88, its highest in three weeks, as the resurgent dollar’s demand coupled with rising equities. Nevertheless, the pair is subject to additional volatility during the upcoming session amid quarter-end flows, and further advances shouldn’t be taken for granted. Meanwhile, government bond yields remained stable, with the yield on the benchmark 10-year Treasury note ending the day little changed around 0.64%.

In the data front, Japan published May Retail Sales, which were up 2.1% MoM, better than anticipated, and down by 12.3% when compared to a year earlier, missing the market’s expectations. Large Retailers’ Sales for the same month fell 16.7% against -11.7% expected. During the upcoming Asian session, the country will release the May Unemployment Rate, foreseen at 2.8%, and the preliminary estimate of May Industrial production, seen down by 5.6% in the month. It will also publish less relevant housing-related data for the same month.

USD/JPY short-term technical outlook

The USD/JPY pair retreated from the mentioned high, now trading around 107.65. It maintains a short-term positive stance, as it settled above the 38.2% retracement of its latest daily slide at 107.50, the immediate support. In the 4-hour chart, the pair is developing below all of its moving averages, with the 20 SMA accelerating higher but below the larger ones. Technical indicators have lost their bullish strength, retreating just modestly from their daily highs. The 50% retracement of the mentioned decline comes at 107.95, the immediate resistance.

Support levels: 107.50 107.10 106.70

Resistance levels: 107.95 108.30 108.65

 View Live Chart for the USD/JPY


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