USD/JPY analysis: upward potential limited

Valeria Bednarik FXStreet

USD/JPY Current price: 106.57

USD/JPY advanced alongside with bond yields, in absence of other clues.
Japan trade deficit better-than-expected, but imports disappointed.

The USD/JPY pair edged higher this Monday, reaching a daily high of 106.72 to close the day a handful of pips below the level. The pair got a modest boost from European bonds, which were modestly up in thin trading, with yields for the 10-year bonds all through the region advancing between 2 and 5 basis points. US Treasury yields, were modestly down in futures trading. Data coming from Japan at the beginning of the day showed that the Trade Balance posted a deficit of ¥943.4B in January, better than the ¥-1,002.0B expected, although worse than the previous surplus of ¥358.7B. Exports rose 12.2%, beating expectations, while Imports were up 7.9%, missing market's forecast of 8.3%. There won't be macroeconomic releases in Japan during the upcoming Asian session, while the US calendar will also remain empty. The short-term picture is neutral for the pair, with the risk still skewed to the downside, as in the 4 hours chart, it remains well below bearish moving averages, while the Momentum indicator heads modestly higher around its 100 level, but the RSI keeps consolidating within negative territory, currently around 44.

Support levels: 106.15 105.70 105.40

Resistance levels: 106.85 107.20 107.60

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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