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The USD/JPY pair now seems to have stabilized just above mid-107.00s after the early uptick during the Asian hours met with some supply near the 107.70-75 region. This zone needs to be surpassed to see USD/JPY running beyond the 108.00 level towards monthly highs at 108.15, FXStreet’s analyst Haresh Menghani briefs.

Key quotes

“Japan’s economy watchers survey showed that confidence about current economic conditions logged a record rise and jumped to 38.8 in June from 15.5 previously. The outlook index rose to 44.0 during the reported month as compared to May’s 36.5 and 24.1 expected. May month trade deficit reduced to ¥556.8 billion from ¥966.5 billion previous. Adding to this, the Current Account surplus jumped to ¥1176.8 billion in May as compared to ¥1088.2 billion estimated.”

“Bulls might still wait for a sustained move beyond the 107.70-75 supply zone before positioning for any further near-term appreciating move. Above the mentioned barrier, USD/JPY is likely to surpass the 108.00 mark and test monthly tops, around the 108.15 region. Bulls might then aim to challenge the very important 200-day SMA, around the 108.35 region, which if cleared will set the stage for an extension of the recent recovery move from multi-month lows.”

“On the flip side, weekly lows, around the 107.25 region, now seems to act as immediate support and is closely followed by the 107.00 mark. Failure to defend the mentioned support levels might turn the pair vulnerable to resume its bearish trajectory and slide back towards the 106.00 round-figure mark.”