USD/JPY nears 107.00 with risk skewed to the upside

The USD/JPY pair continues to comfortably consolidate around 106.80 but unable to run amid decreased interest on the greenback. On the data front, Japanese Machine Tool Orders plummeted 31.1% YoY in July while US Initial Jobless Claims are foreseen at 1.12M from 1.18M in the previous week, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Supporting the pair, government bond yields hold near their recent one-month highs. Equities, on the other hand, trade mostly in the red, although not far from their opening levels.”

“Japan published the July Producer Price Index, which was up 0.6% in the month, and down 0.9% when compared to a year earlier, both figures beating expectations. Machine Tool Orders, in the same month, plummeted 31.1% YoY. The US will publish today its usually weekly unemployment data. Initial Jobless Claims are foreseen at 1.12M down from 1.18M in the previous week.”

“The short-term picture indicates that the risk is skewed to the upside, as the price remains above its 200 SMA, which provides intraday support around 106.56, the daily low. The 20 SMA maintains its bullish slope, further advancing above the 100 SMA. A break below the daily low should open doors for a steeper decline towards the 105.70 price zone.”