USD/JPY Analysis: sellers retain control despite the latest bounce

USD/JPY Current Price: 106.13

Japanese yen seesawing at the rhythm of sentiment.
Wall Street’s recovery helped the pair bounce from fresh multi-year lows.
USD/JPY bounced roughly 200 pips but retains its bearish technical stance.

The USD/JPY pair bounced from a multi-year low of 104.44, surging roughly 200 pips to settle at around 106.10. The yen surged as risk aversion dominated the weekly opening amid mounting trade tensions and decreasing hopes for a deal Brexit. The dismal mood reversed after some positive comments from US President Trump that anyway were not backed by Chinese authorities. Still, the dollar recovered alongside Wall Street, while US Treasury yields remained in the green throughout the day. Japan released the final versions of the June Leading Economic Index, and the Coincident Index, which resulted as previously estimated at 93.3 and 100.4 respectively, while the US released July Durable Goods Orders, which rose by more than anticipated, further lifting the pair. During the upcoming Asian session, Japan will publish the July Corporate Service Price, seen at 0.5% vs. the previous 0.7%.

USD/JPY short-term technical outlook

Despite the nice comeback, the pair is still offering a bearish stance in its 4 hours chart, as it has been unable to recover beyond its 20 and 100 SMA, both heading lower and converging in the 106.10/20 price zone. Furthermore, technical indicators in the mentioned chart have corrected extreme oversold conditions, but stalled their recoveries just below their midlines, now gaining bearish traction. The bearish case could gain adepts on a break below the 106.00 level, while a break through 106.40 could see the advance extending toward 107.00 before sellers return.

Support levels: 106.00 105.70 105.25

Resistance levels: 106.40 106.80 107.10

View Live Chart for the USD/JPY

Share: Analysis feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.