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Pressure mounts ahead of US critical data as USD/JPY eases from 107.04 to the current 106.70 price zone. The pair is gaining bearish traction in the short-term, although further declines are not yet confirmed, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Japanese data was encouraging, as the Tertiary Industry Index recovered to 7.9% in June from -2.9% in the previous month. The focus now shifts to the US, as the country will end the week publishing July Retail Sales, seen up monthly basis 1.9%, and the preliminary estimate of the Michigan Consumer Sentiment Index for August, foreseen at 72 from 72.5 in the previous month.”

“The 4-hour chart shows that the price is pressuring a bullish 20 SMA, which crossed above the larger ones. The Momentum indicator, in the meantime, is crossing its 100 line into negative ground, as the RSI consolidates at around 56.” 

“The 23.6% retracement of the latest bullish run provides immediate support at 106.35, with a break below the level opening the door for a steeper slide.”