USD/JPY: recovery limited, still in bearish ground
USD/JPY Current price: 112.08
- US Treasury yields marginally higher, supporting USD/JPY recovery above 112.00.
- Short-term bearish stance to prevail as long as the pair trades below 112.60.
The USD/JPY pair recovered the 112.00 level and trades a handful of pips above the level underpinned by the recovery of Asian stocks' markets and an uptick in US Treasury yields, as the benchmark yield for the 10-year Treasury note is up to 3.17% after spending Monday at around 3.15%, weighing on the yen. Market players are quite sensitive after equities rout from last week, cautiously adding bets but unwilling to send a certain pair on a certain direction.
There were no macroeconomic releases in Japan, and the US calendar will offer different minor figures, being the most relevant September Industrial Production, foreseen up 0.3% vs. the previous 0.4%, and Capacity Utilization for the same month, seen increasing from 78.1% to 78.2%. The country will also release the JOLTS Job Opening for August, and TIC flows for the same month.
The pair is short-term bearish according to technical readings in the 4 hours chart, as the latest recovery stalled well below the 100 and 200 SMA, both lacking directional strength, while technical indicators have lost their upward strength after nearing their midlines, now resuming their declines. Below 111.90 the risk turns back to the downside, although a steeper decline should be expected on a break of 111.50, the 100 DMA.
Support levels: 111.90 111.50 111.20
Resistance levels: 112.25 112.60 113.00
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.
