USD/JPY: losing ground, downside favored

Valeria Bednarik FXStreet

USD/JPY Current price: 111.40

Safe-haven yen came under selling pressure as European equities opened with a strong note, following weekend news indicating that the European Commission approved Italy's plan to rescue two failed banks for as much as €17 billion. The USD/JPY pair hit 111.72 before retreating with US poor data fueling the decline that indicates further slowdown in the economy's momentum. Orders for durable goods fell by 1.1% in May, while the core reading posted a modest 0.1% advance, both falling short of expectations.

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The Chicago Fed manufacturing index for June came in at -0.26, below the expected 0.20 and a previous revised 0.57. The pair trades marginally higher daily basis, finding some support in mute yields and strong gains in equities markets. Still the technical suggests that the risk has turned towards the downside, as in the 4 hours chart, technical indicators head now sharply lower around their mid-lines , whist the price is approaching a bearish 200 SMA, a few pips below the current level. There's an immediate Fibonacci support around 111.25, but the pair needs to break below 110.90 to confirm a bearish continuation towards 110.50.

Support levels: 111.25 110.90 110.50

Resistance levels: 111.60 112.00 112.45

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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