USD/JPY: long-term perspectives are fogged

By FXstreet.com | July 16, 2014 AAA

FXStreet (Moscow) - USD/JPY is retreating from the weekly highs set at 101.78, as bullish momentum is waning. Is there a chance for the pair to finish the week in a green zone?

No escape yet

On a mid-term scale USD/JPY continues to consolidate in a range limited by 102.00 on the upside and 101.10/00 on the downside. Bearish engulfing pattern that occurred on weekly charts might suggest that the pair will break free to the downside, though we still need a confirmation in the form of bearish weekly candle. There are several factors that may push USD/JPY by the end of the week. The key card up JPY bulls sleeve is geopolitical risks. Tensions between Russian and Western countries are rising again, which is supportive for the Japanese currency that is traditionally regarded as a safe-heaven. Then Philly Fed Manufacturing Index is expected to come down to 15.6 in July from 17.8 in June, which is potentially negative for USD. The above mentioned factors might not to be strong enough to ensure a clear downside breakthrough, but they are likely to discourage USD/JPY bulls for the time being.

What are today’s key USD/JPY levels?

Today's central pivot point can be found at 101.70, with support below at 101.60, 101.52 and 102.42 with resistance above at 101.78, 101.88, and 101.96. Hourly Moving Averages are mostly bearish, with the 200SMA at 101.62 and the daily 20EMA at 101.71. Hourly RSI is bearish at 34.

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