USD/JPY: down to familiar support, watch a break of 111.00 to ... 110.60?
Currently, USD/JPY is trading at 111.20, down -0.06% on the day, having posted a daily high at 111.33 and low at 111.15.
USD/JPY is trading with a tendency to the downside, held up at the familiar support here, consolidating the minor recovery from 110.80's low of the double top at 114.30 highs. The markets are thin ahead of a very busy week for the dollar, at least, with nonfarm payrolls as the showdown at the end of the week that could week determine the fate of the greenback ahead of June's FOMC.
"Yield spreads remain relatively stable and this week’s U.S. releases (PCE, Beige Book, NFP) are likely to be the core focus given their importance to the Fed outlook and the broader market tone. Measures of implied JPY volatility are low and risk reversals are steady pricing a premium for protection against JPY strength," explained analyst at Scotiabank
Domestically, from Japan, we had a series of data with Japan's retail sales and the unemployment numbers coming in as positive results, supporting the yen.
- Japan Retail Trade (YoY) came in at 3.2%, above expectations (2.3%) in April
- Japan Retail Trade s.a (MoM) climbed from previous 0.2% to 1.4% in April
- Japan Retail Trade (YoY) came in at 3.2%, above expectations (2.3%) in April
- Japan Unemployment Rate in line with expectations (2.8%) in April
USD/JPY levels
USDJPY: The short term momentum indicators are flat - Jim Langlands:
"On the downside, below 111.00 would lead back to 110.85, which should be strong, and then to 110.60, ahead of last Thursday’s low of 110.23. There are better things to trade while the Yen is chopping around like this."
Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the pair has made little progress, comfortably consolidating around the 50% retracement of its latest bullish run and below its moving averages in the 4 hours chart.
4hr chart
"Technical indicators head marginally lower within bearish territory, lacking momentum amid the absence of volume. A strong support comes at 110.85, with a break below it favoring a stronger slide towards the 110.00 region," - Bednarik.