USD/JPY Current price: 108.63
- Japan will publish on Wednesday the preliminary estimate of the March Leading Economic Index.
- Higher US Treasury yields limited the bearish potential of USD/JPY.
- USD/JPY is at the lower end of its latest range, needs to break the 108.30 support.
The USD/JPY pair trades in the 108.60 price zone heading into the Asian opening, posting a modest daily decline. The pair fell to 108.34, bouncing on the back of an uptick in government bond yields. Inflation-related concerns sent the yield on the benchmark 10-year note to 1.63%, offsetting the negative effects of plummeting stocks. The broad dollar’s weakness, however, maintained the pair in the red for most of the day.
Japan published March Overall Household Spending, which was up 6.2% YoY, much better than the 1.5% expected. Early on Wednesday, the country will publish the preliminary estimate of the March Leading Economic Index, previously at 98.7, and the Coincident Index for the same month.
USD/JPY short-term technical outlook
The USD/JPY has limited bearish potential in the near-term, but bears retain control. The 4-hour chart shows that the pair has fallen below all of its moving averages, with a bearish 20 SMA providing intraday resistance. Technical indicators have bounced from their daily low, with the Momentum advancing within neutral levels but the RSI holding near oversold readings. The pair has bottomed twice in the 108.30 price zone, with higher chances of a bearish continuation on a break below the level.
Support levels: 108.30 107.90 107.50
Resistance levels: 108.85 109.25 109.70
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