USD/JPY Current price: 106.87
- Tensions between the US and China remain, alongside reopening´s hopes.
- US services output seen contracting to 32 in April.
- USD/JPY neutral-to-bearish, support at 106.35.
The greenback is up this Tuesday, as investors struggle between optimism about economic reopenings and tensions between the US and China. Overall, the sentiment seems positive, as equities are up in Europe, while US Treasury yields ticked marginally higher. The USD/JPY pair trades at the upper end of a tight intraday range, not far below the 107.00 figure.
Japanese markets remained closed amid a local holiday in the middle of the Golden Week, which extends into Wednesday. The US will publish today the April ISM Non-Manufacturing PMI, foreseen at 32 from 52.5 previously. Markit will release the final version of the Services PMI for the same month, foreseen unchanged from the preliminary estimate at 27.
USD/JPY short-term technical outlook
The USD/JPY pair trades with a heavy tone, and its bullish potential remains limited. The 4-hour chart shows that USD/JPY is hovering around a flat 20 SMA, while the larger ones maintain their bearish slopes above the current level. Technical indicators recovered and head north, with the Momentum still below its midline and the RSI currently at 50, falling short from supporting additional advances. The risk is skewed to the downside, although the pair would need to break below 106.35, the immediate support level, to be able to extend its slide.
Support levels: 106.35 106.00 105.65
Resistance levels: 106.95 107.30 107.70
View Live Chart for the USD/JPY
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