USD/JPY: neutral, but scale leans towards the downside
USD/JPY Current price: 111.25
The USD/JPY pair trades marginally lower, but still stuck to a tight range around 111.25, the 50% retracement of the April/May's rally, where it spent most of this week. The soft tone in equities and yields keep the upside limited in the pair ahead of Wall Street's opening, and US macroeconomic releases. The Nikkei flash Manufacturing PMI, released overnight, dropped to a seven-month low of 52.0 in June from 53.1 in May, indicating slower growth, although with the index still in expansionary territory.
Daily basis, the pair is unchanged for a third consecutive day, with an early week advance contained by selling interest around the 100 DMA, currently around 111.60. Shorter term, the 4 hours chart shows that the price is also stuck around a modestly bearish 200 SMA, while technical indicators head nowhere, around their mid-lines . In the same chart, the 100 SMA is also horizontal, converging with the 61.8% retracement of the same rally at 110.50. The pair has bottomed multiple times between 110.80 and 110.90 this week, being then, the level to break to confirm a bearish extension. To the upside, approaches to the 112.00 level will likely attract selling interest, as bears are still leading the way in the pair.
Support levels: 110.85 110.50 110.10
Resistance levels: 111.60 112.00 112.45
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.
