USD/JPY Could Aim for 110.00 Level, Downside Seems Limited

USD/JPY Could Aim for 110.00 Level, Downside Seems Limited

13 May 2016, 08:47
Roberto Jacobs

USD/JPY Could Aim for 110.00 Level, Downside Seems Limited

On the last trading session of the week, the USD/JPY pair sentiment remains muted with a slight negative bias ahead of today's monthly retail sales and consumer confidence data releases from the US.

Except for its up-move on Monday, the USD/JPY pair seems to consolidate its recovery from multi-month lower levels touched during the beginning of the month. The pair has repeatedly failed to clear 109.40 weekly high resistance and reversed some of its gains. However, the upward trending short-term moving averages (10, 20-day SMAs) support near 108.75-70 seems to suggest that the pair might resume its near-term recovery after a brief phase of consolidation.

Moreover, recent comments from the Japan's finance minister Taro Aso on forex market intervention on renewed strength in the Yen also seems to extend support to the pair, restricting any sharp reversal from higher levels.

Technical levels to watch

On the immediate upside weekly highs resistance near 109.40 remains immediate hurdle, which if cleared should aim for levels beyond 110.00 psychological mark towards testing 50-day SMA resistance near 110.40-45 zone.

On the downside, the pair might continue to find immediate support near 108.40-35 horizontal zone. Even if the pair fails to hold this immediate support, any further downside now seems to be limited till 10-day SMA support, currently near 107.80 level.


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