- USD/JPY benefits from broad dollar strength.
- Range trade holds amid mixed cues on the technical set up.
- 100-bar SMA is the level to beat for the bulls.
USD/JPY is trying hard to break higher from the downside consolidation phase following a dip 107.20 levels in the US last session.
After a volatile session, the bulls are fighting back control in early Asia, mainly benefiting from broad-based US dollar strength, as impressive US Retail Sales data and worrisome coronavirus stats from the US continue to underpin the haven demand for the buck.
However, the negative tone in the S&P 500 futures could emerge a drag on the pair, going forward. The technical set up on the 15-minutes chart also paints a mixed picture for the spot in the immediate term.
The spot extends range play while traversing withing a potential symmetrical triangle pattern on the said timeframe and on a pattern confirmation could likely test the pattern target of 107.58.
The 107.37/38 resistance zone, however, remains a tough nut to crack for the USD/JPY buyers, where the falling trendline resistance and horizontal 100-bar Simple Moving Average (SMA) coincide.
The immediate downside is capped by the confluence of the 200 and 50-bar SMAs around 107.34. A break below which would expose the horizontal 21-bar SMA at 107.31.
A sustained breach of the rising trendline support at 107.21 could confirm the triangle breakdown and put the 107 level at risk.
Note that Relative Strength Index (RSI) has turned south and looks to test the midline at 50, indicating some near-term weakness.
All in all, a range bounce price action is expected, heading into the Tokyo open, with the sentiment on the Asian equities, USD dynamics and Japanese trade balance closely watched for a decisive break in either direction over the coming hours.
USD/JPY: 15-minutes chart
USD/JPY additional levels
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.
Recommended content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.