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The USD/JPY pair is trading around the 108.00 level, now below its 100 and 200 DMA, oversold in the short-term, as FXStreet’s Chief Analyst Valeria Bednarik notes.

Read: S&P revises Japan’s outlook to stable on increased debt uncertainty

Key quotes

“Japan released overnight Labor Cash Earnings, which fell by 0.6% YoY, and the preliminary estimate of Machine Tool Orders for May, which collapsed by 52.8%. The US, on the other hand, has just released the NFIB Business Optimism Index for May, which improved to 94.4 from 90.9.”

“In the shorter-term, and according to the 4-hour chart, USD/JPY has reached oversold conditions, with technical indicators barely recovering from daily lows, without sufficient strength to suggest a bottom has been reached.” 

“The 20 SMA has turned firmly lower well above the current level, as the pair battles to hold above a mildly bullish 100 SMA. Overall, the risk remains skewed to the downside as long as the USD/JPY pair remains below the 108.45 level.”

 

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