USD/JPY: limited upward potential, despite the latest advance

Valeria Bednarik FXStreet

USD/JPY Current price: 112.35

Dow at record highs/yields recovering pushing the pair higher
Pair back to its previous range, but scope to retest 113.43

The USD/JPY pair trades near the upper end of its latest daily range, having recovered the 112.00 threshold on a broad-based more optimistic stance against the greenback. Wall Street is set to open higher and at all-time highs, whilst US Treasury yields extend their Monday's late advance, all of which backs the case for a rising USD/JPY. Data coming from the US was generally neutral, as US industrial production rose in September by 0.3%, slightly above the 0.2% expected and picking up from previous -0.7%, although capacity of utilization rose by less than expected, up by 76.0% from previous 75.8%. From a technical point of view, however, the upward potential remains limited, as the price seems unable to surpass a flat 100 SMA in the 4 hours chart, acting as dynamic resistance at 112.45, also the daily high. In the same chart, the RSI indicator heads higher around 55, but the Momentum remains flat around its 100 level, reflecting the limited buying interest at current levels. Nevertheless, an upward acceleration through the mentioned level should lead to a retest of 113.43, the high set this month.

Support levels: 112.00 111.60 111.20

Resistance levels: 112.45 112.80 113.10

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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