USD/JPY turns negative, Shanghai Composite drops 0.8 percent

The yen is on the rise, possibly due to weakness in the Chinese stocks.
The bullish breakout remains elusive.

Omkar Godbole FXStreet Contributor

The Japanese Yen seems to have caught a bid wave, tracking the decline in the Shanghai Composite index.

The Chinese index has opened on a negative note, now trading 0.9 percent lower on the day. Consequently, the USD/JPY pair is losing altitude. As of writing, the spot is down 0.20 percent at 107.20, having clocked a session high of 107.61.

The retreat from 107.61 to 107.28 marks failure to hold above 107.49 - key resistance level. A clear break above the key hurdle would confirm the much-awaited bullish breakout and shall open the doors to 108.00 - 108.28 (Jan. 26 low).

The pair risks falling further if the S&P 500 futures (up 0.4 percent) turn negative and the US March retail sales print below estimates.

USD/JPY Technical Levels

A below 107.02 (10-day MA) would allow a drop to 106.75 (50-day MA) and 1006.62 (April 10 low). On the higher side, a daily close above 107.49 (April 5 high) could yield a sustained rally to 108.00 (psychological level) and 108.28 (Jan. 26 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Oversold	High
1H	Bearish	Neutral	Shrinking
4H	Bearish	Neutral	Expanding
1D	Bullish	Overbought	Expanding
1W	Bearish	Neutral	Expanding
Updated Apr 16, 02:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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