USD/JPY to gain further ground above the 107.95 Fibonacci resistance

USD/JPY is trading near the 3-week high reached on Monday at 107.88 and needs to advance beyond 107.95 to unfold further upside momentum. Furthermore, Japanese data released at the beginning of the day didn’t help the yen, as all figures missed the market’s expectations, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Japanese May Unemployment Rate surged to 2.9%, while Industrial Production in the same month plunged 8.4% MoM and fell 25.9% when compared to a year earlier. Housing Starts, however, were down 12.3% vs. -15.9% expected. The US session will bring the Chicago PMI for June, foreseen at 45, and the mentioned testimony from Fed’s authorities.”

“USD/JPY is trading between Fibonacci levels, holding above 107.50, the 38.2% retracement of its June slump. The risk of a downward move is limited as long as the pair remains above the level.” 

“In the short-term, and according to the 4-hour chart, the risk is skewed to the upside, although the momentum is limited. The USD/JPY pair is developing above all of its moving averages, with the 20 SMA crossing beyond the 100 SMA, as technical indicators consolidate well into positive levels. The next Fibonacci resistance comes at 107.95, the level to surpass to be able to gain further ground.”