USD/JPY: Bulls need to overthrow the 106.70 resistance

USD/JPY trades with modest gains around 106.35, still confined to familiar levels. The pair needs to advance beyond 106.70 for bulls to have better chances, Valeria Bednarik, Chief Analyst at FXStreet, reports.

Key quotes

“Japan published its final version of Q2 GDP, which was downwardly revised to -7.9% better than the -8.1% expected. The country’s Trade Balance resulted in ¥137.3B, much better than the ¥-181.3B anticipated by analysts. Even further, the August Econ Watchers Survey on the current situation improved from 41.1 from 43.9.”

“The USD/JPY pair is still technically neutral in the short-term. The 4-hour chart shows that it’s resting above a directionless 20 SMA, while the larger moving averages head marginally lower below this last. Technical indicators, in the meantime, lack directional strength, holding just above their midlines.”

“Bulls would have better chances on a break above 106.70, the immediate resistance level.”