USD/JPY at risk of losing the 105.00 level and accelerating its slump

The USD/JPY pair trades around its daily opening in the 105.40 price zone, on pause amid a cautious mood. Japanese data resulted worse than anticipated while the US session will bring several Fed’s speakers, including vice-chair Clarida, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Japanese data published at the beginning of the day was disappointing, as Industrial Production rose 1% MoM in August, below the 1.7% expected. Yearly basis, Industrial Production fell 13.8%. Capacity Utilization in the same period, rose 2.9% missing the expected 3.6%. The US macroeconomic calendar includes today the September PPI, foreseen at 0.2% YoY, and several Fed’s speakers, including Vice-chair Clarida.”

“The USD/JPY pair has a limited bullish potential, according to the 4-hour chart, as it continues to trade below all of its moving averages. Furthermore, the 20 SMA maintains its bearish strength and is about to cross below the 100 SMA. Technical indicators have recovered unevenly from near oversold readings, and while they still head higher, they remain below their midlines.” 

“The USD/JPY pair needs to break above the 105.80 resistance to gather bullish momentum, something quite unlikely at this point. Bears have better chances, although they need a break below 105.00 to confirm a new leg south.”