USD/JPY rebounds from 105.40 support but maintains a downward bias. Resistance at last week’s high 106.20 blocks passage above with 106.50 behind. Dollar weakness and the state of the US economy orders trading, as FXStreet’s analyst Joseph Trevisani notes.
Key quotes
“As has been true for most of the post-pandemic period and especially for the past month’s accelerated decline in the USD/JPY it has been US economic developments that have provided motive force.”
“Last week’s rebound from 105.40, far above the July 31 low at 104.19 and equally far from the bottom of the descending channel at 104.12, shows an ebbing downward velocity. But lack of a vigorous decline is not the same as recovery.”
“For the USD/JPY to break the negative cycle the US has to show signs of a strengthening economy, particularly a resumption of robust job growth.”