USD/JPY: holding at lows despite better market mood

USD/JPY Current price: 112.25

  • Equities and yields pared the bleeding and attempt to recover some ground.
  • US Michigan Consumer Sentiment Index to close the macroeconomic week.

The USD/JPY pair bottomed at 111.82 late Thursday, its lowest in almost a month, as equities and yields were under strong pressure all through the day. The sour sentiment, however, cooled down during Asian trading hours, with worldwide equities out of the red, and Treasury yields posting modest bounces but off their weekly highs. The pair, however, remains confined to the lower end of its weekly range, as the dollar is still the weakest in the G-10 sphere. The pair hit a daily high of 112.49, below Thursday's one, before retreating to the current 112.30 price zone. There were no relevant macroeconomic news in Japan, and the US will release some minor figures related to trade prices, ahead of the more relevant Michigan Consumer Sentiment Index, the preliminary reading for October foreseen at 100.4 vs. September 100.1.

The short-term picture indicates that the risk remains skewed to the downside, as in the 4 hours chart, it is struggling around the 200 SMA, unable to clear it, while technical indicators have corrected extreme oversold conditions before resuming their declines, dip into negative ground. The pair depends mostly on government bond yields today and to a lesser extent, on US data. The pair will lose its downward bias on a firm recovery above 112.60.

Support levels: 111.85 111.50 111.20

Resistance levels: 112.60 113.00 113.40

View Live Chart for the USD/JPY

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