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Foreign Exchange Market Commentary: USD/JPY

The USD/JPY pair edged lower for a second consecutive week, plunging on Friday to its lowest in over a month at 111.00, as soft US data and falling US Treasury yields added to US political jitters to send the yen higher this last week. The USD/JPY pair advanced on Thursday, after the Bank of Japan maintained its ongoing monetary policy unchanged, but delayed the timing on when the 2% inflation target is expected to be reached, but the yen quickly resumed its advance on dollar’s weakness. As for yields, the 10-year note benchmark in the US traded as low as 2.22% to finally settle at 2.23%, whilst the 30-year note interest posted its largest weekly decline in over three months, down to 2.80%. The week will start with Japan releasing its June leading indexes and July preliminary Manufacturing PMI, this last expected at 52.3 from a previously revised 52.4. The daily chart shows that the pair stands a few cents above the 61.8% retracement of its latest weekly advance at 110.90 the immediate support, having broken below its 100 DMA, this last at 111.45, while technical indicators head sharply lower within bearish territory, all of which support a bearish extension. In the 4 hours chart, technical indicators have bounced modestly from oversold readings, but are far from supporting an upward correction, with the price also developing below its moving averages.

Support levels: 110.90 110.55 110.20

Resistance levels: 111.45 111.90 112.35

Henyep Capital Markets
Henyep Capital Markets
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