USD/JPY retreats from daily highs, looks to close the week flat around 110.00

USD/JPY rose to a daily high of 110.35 on Friday.
10-year US Treasury bond yield erased its daily recovery gains.
US Dollar Index stays in the positive territory after mixed US data.

Eren Sengezer FXStreet

After closing the previous two trading days in the negative territory, the USD/JPY pair staged a rebound and reached a daily high of 110.35 in the early American session. However, the pair struggled to preserve its bullish momentum and was last seen gaining 0.22% on the day at 110.10. For the week, USD/JPY remains on track to close virtually unchanged.

The broad-based USD strength helped USD/JPY gain traction ahead of the weekend. The risk-averse market environment helped the greenback find demand as a safe haven and the US Dollar Index (DXY) advanced to 92.75 before going into a consolidation phase. At the moment, the DXY is up 0.12% at 92.67.

Meanwhile, the mixed macroeconomic data releases from the US failed to trigger a noticeable market reaction. The US Census Bureau reported that Retail Sales increased by 0.6% in June, beating the market expectation for a decline of 0.4%. On a negative note, the University of Michigan's Consumer Sentiment Index declined to 80.8 in July's advanced reading from 85.5 in June, missing analysts' estimate of 86.5.

USD/JPY near-term outlook

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, thinks that USD/JPY could continue to push lower with a break below the July low at 109.54.

"USD/JPY’s recent bounce failed along the breached 2021 uptrend line, the outlook stays negative," Jones notes. "Attention is currently at the July low at 109.54. Failure here would put the 108.56 late May low and the 107.48 April low back on the map. Resistance above this week’s high at 110.70 comes in at the 110.97 March peak and also at the 111.11 June 24 as well as at the current July high at 111.66."

Additional levels to watch for

USD/JPY

Overview
Today last price	110.13
Today Daily Change	0.29
Today Daily Change %	0.26
Today daily open	109.84

Trends
Daily SMA20	110.57
Daily SMA50	109.88
Daily SMA100	109.37
Daily SMA200	106.88

Levels
Previous Daily High	110.09
Previous Daily Low	109.71
Previous Weekly High	111.19
Previous Weekly Low	109.53
Previous Monthly High	111.12
Previous Monthly Low	109.19
Daily Fibonacci 38.2%	109.86
Daily Fibonacci 61.8%	109.95
Daily Pivot Point S1	109.67
Daily Pivot Point S2	109.5
Daily Pivot Point S3	109.29
Daily Pivot Point R1	110.05
Daily Pivot Point R2	110.26
Daily Pivot Point R3	110.42

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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