Our preference: short positions below 111.20 with targets at 110.95 & 110.80 in extension.Alternative scenario: above 111.20 look for further upside with 111.35 & 111.50 as targets.
A bounce in Treasury yields and equities helped USD/JPY recover the 111.00 mark.
First-tier data released Wednesday failed to clear uncertainty.
The USD/JPY pair recovered above 111.00 and trades near a daily high of 111.16,
finding support in the better performance of equities during the Asian session ad a bounce in US Treasury yields ahead of the opening.
Following the flood of first-tier news release Wednesday, most major pairs are little changed, as the uncertainty hasn’t been cleared as expected.
Both, the ECB and the Fed offered dovish statements, Brexit has been once again delayed, this time to the end of October,
while US inflation remains subdued and EU growth depressed, backing the central banks’ decisions. Japan released overnight March Money Supply,
which increased by 2.4% YoY. The US macroeconomic calendar will include today the March Producer Price Index,
with the core readings seen up by 0.2% MoM and by 2.4% YoY, and weekly unemployment claims for the week ended April 5.
The 4 hours chart for the pair shows that the price is finding resistance around a flat 200 SMA, while the 20 SMA maintains its bearish slope, nearing the larger one from above,
making of the 111.20 area the immediate resistance. Technical indicators in the mentioned chart have recovered further within negative levels,
with modest upward slopes that fall short of indicating buying interest. The bearish case would likely resume on a break below 110.75, the 50% retracement of the latest bullish run,
while bulls will take over if the pair manages to advance beyond 111.55.