USD/JPY: Risk skewed to the downside with suppport seen at 105.90

The USD/JPY pair hovers around 106.20, with an increased downward bias despite a resilient dollar. On the data front, the Japanese Leading Economic Index improved by more than anticipated in July, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Japan published the preliminary estimate of July Leading Economic Index, which improved to 86.9, better than the 84.6 expected. The Coincident Index for the same period, however, came in at 76.2, missing expectations of 79.” 

“The 4-hour chart for the USD/JPY pair shows that it´s seesawing around a bullish 20 SMA, which advances above bearish larger ones, although all of them are still inside a tight range, reflecting the absence of directional strength. Technical indicators, in the meantime, head marginally lower around their midlines, leaning the scale to the downside, without confirming a steeper decline.” 

“A break below 105.90, could signal further slides, although a substantial directional movement seems out of the picture for this Monday.”