USD/JPY Prints Big Gains But Could It Countinue?
The American dollar posted some tepid gains against its Japanese rival, with the JPY down on tepid local data and a generally positive mood amongst worldwide investors.
The Japan’s leading index declined as expected to 104.9 in July, from 106.5 in June.
This was the lowest reading since March, when the score was 103.9, and adds to concerns over the local economic recovery.
The pair fell briefly below the 119.00 level at the beginning of the day, but buying interest pushed the pair back higher, up to a daily high of 1119.58.
Nevertheless, the pair was unable to extend its gains and remained stuck around 119.35, the 38.25 retracement of the latest weekly decline.
In short term, the 1 hour chart continues to favor the downside, as the price develops well below its 100 and 200 SMAs, with the shortest now providing a dynamic resistance, whilst the technical indicators present a mild negative tone in neutral territory.
In the 4 hours chart, the technical indicators also lack directional strength, but remain below their mid-lines, whilst the 100 SMA extended its decline well above the current level, converging with the 61.8% retracement of the same rally around 121.30.