USD/JPY rebounds on Friday erasing most of Thursday's losses but remains under 108.00
- US Dollar recovers on Friday, ends week negative but not so weak.
- USD/JPY bounces but remains below critical resistance seen at 108.00/10.
The USD/JPY pair is about to end the week with modest losses after a strong recovery on Friday. A correction of the greenback across the board after Thursday’s sharp decline boosted the pair.
During the Asian session tested the weekly low at 107.20 but then turned to the upside. The US Dollar was the best performer on Friday, removing some of the bearish pressure. Comment’s from Fed’s officials reinforcing rate cut expectations weigh on the US Dollar.
The pair rose back above 107.50. It spiked to 107.95 during the American session following the reports that Iran Guards seized a British Oil tanker but quickly pulled back to 107.65/70, where it was trading near the end of the week.
Technical outlook
According to Valeria Bednarik, Chief Analysts at FXStreet, the weekly chart shows the pair developing far below all of its moving averages, and with the 20 SMA gaining bearish strength below the larger ones. “Technical indicators in the mentioned chart have extended their declines within negative levels, further supporting the negative case.”
She adds the daily chart shows USD/JPY stuck around the 23.6% retracement of its July’s decline. “The 20 DMA is flat at around 108.10, while the 100 and 200 DMA maintain their bearish slopes well above the shorter one.” The pair recovered on Friday but failed to regain the critical 108.00/10 technical area.