USD/JPY to turn bearish on a break below 106.95

The USD/JPY pair remains lifeless around 107.35, the 23.6% retracement of its latest daily decline but could turn bearish once below 106.95, FXStreet’s Chief Analyst Valeria Bednarik informs.

Key quotes

“Japan released its May Merchandise Trade Balance, which posted a smaller-than-expected deficit of ¥833.4 billion. However, imports plunged by 26.2% while exports decreased by 28.3%, both below the market’s expectations.” 

“The USD/JPY pair is technically neutral in the short-term, and despite the broad dollar’s weakness, the bearish potential seems limited.” 

“In the 4-hour chart, USD/JPY continues hovering around the 20 and 200 SMA, while the 100 SMA remains flat around 107.90. Technical indicators, in the meantime, stand within positive levels, although lacking directional strength.” 

“The bearish case will be firmer on a break below 106.95 while only above 107.80 the pair could have chances of resuming its advance.”