USD/JPY: heavy equities weigh on the pair

Valeria Bednarik FXStreet

USD/JPY Current price: 113.31

USD/JPY within a limited weekly range ahead of US first-tier releases.
US Treasury yields, European equities trading marginally lower.

The USD/JPY pair kept retreating overnight after hitting 113.74 this Tuesday, but trades within its weekly tight range at 113.31 ahead of US inflation figures. The intraday decline came as a consequence correcting lower after the impressive rally seen over the last few days. European indexes also trade marginally lower, mostly as investors are cautious ahead of US inflation and more relevant, Fed's decision. The yield of the 10-year US Treasury bond eases to 2.40% after being as high as 2.42% in the past American session. The pair will probably show a limited reaction to the upcoming inflation figures unless the readings are really shocking either way.

Technical readings in the 4 hours chart lean the scale toward the downside, as indicators head marginally lower within neutral territory while moving averages lack directional strength, below the current level. Larger time frames, however, indicate that the downward potential is limited, suggesting that the pair could correct lower in the shorter term before picking up. The immediate support is 113.10, followed by 112.60. The pair will turn bearish below this last as it will then be breaking below its 100 and 200 DMAs. Beyond the 113.60/70 region, on the other hand, the risk turns towards the upside, with scope then to extend gains up to 114.40.

Support levels: 113.10 112.60 112.20

Resistance levels: 113.65 114.00 114.40

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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