USD/JPY Analysis: holding on to gains
|USD/JPY Current Price: 108.36
- BOJ’s Governor Kuroda scheduled to speak early Asia, no news expected.
- USD/JPY poised to extend its advance toward 109.31, August monthly high.
The USD/JPY pair recovered from a daily low of 108.02 to settle around Friday’s close at 108.42, in a dull trading Monday. Both countries celebrate local holidays this Monday, without releasing macroeconomic data. The Japanese currency appreciated throughout the first two sessions of the day, following the lead of equities, weighed by the headlines related to the US-China trade talks and Brexit negotiations. In the first case, both countries have come to a truce in their trade war, announcing some progress in negotiations, although more talks coming in the next few months. In regards to Brexit, the stalemate situation continues.
Bank of Japan´s Governor Kuroda is due to offer a speech this Tuesday but could hardly surprise investors with something fresh related to the country’s monetary policy. Later in the day, the country will release August Industrial Production and Capacity Utilization, seen declining monthly basis, and the Tertiary Industry Index for the same month, seen at -0.2%.
USD/JPY short-term technical outlook
The USD/JPY pair is entering the Asian session with a bullish stance, as the pair bounced after briefly piercing the 23.6% retracement of its latest bullish run. In the 4 hours chart, technical indicators have eased from overbought levels, but show no aims of extending their slumps, while the 20 SMA keeps advancing below the current level, and above the 100 and 200 SMA. The pair has chances to extend its rally toward the 109.30 price zone on a break above 108.65, the immediate resistance.
Support levels: 108.00 107.60 107.25
Resistance levels: 108.65 109.00 109.35
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