USD/JPY Analysis: barely holding above 106.00
|USD/JPY Current Price: 106.19
- Japan´s manufacturing activity remained in contraction territory in August.
- Wall Street futures down, anticipating a sour start in the Asian session.
- USD/JPY maintains the bearish tone, steeper decline once below 105.60.
The USD/JPY pair traded between 105.90 and 106.40 this Monday, unable to find a clear direction but holding above 106.00 at the end of the day. The pair came under selling pressure at the weekly opening as reciprocal tariffs between the US and China came into effect as expected, spurring demand for safe-haven assets, which was anyway limited by a holiday in the US keeping local market’s closed. Equities in Asia closed in the red, European ones in the green, while Wall Street futures are down ahead of the Asian opening. Japan released Monday the Nikkei Manufacturing PMI, now renamed the Jibun Bank Manufacturing PMI, which resulted in August at 49.3, down from 49.5 in July. This Tuesday, the country will release minor money data, which can hardly interfere with sentiment-related trading.
USD/JPY short-term technical outlook
The USD/JPY pair has spent the day see-sawing around the 38.2% retracement of its August decline at 106.30, currently trading a handful of pips below the level. The pair is technically neutral-to-bearish, according to the 4 hours chart, as indicators head nowhere just below their midlines. Also, the price is hovering around the 20 and 100 SMA, both confined to a tight 10 pips’ range. The pair would resume its decline on a break below 106.00, but it will be below the 105.60 support where bears would take over the pair.
Support levels: 106.00 105.60 105.20
Resistance levels: 106.65 106.90 107.20
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