USD/JPY: Potential to slump once below 106.95

USD/JPY is ending the week confined to a fifteen pips’ range ever since the day started, trading around the 107.50 price zone, although still lacking direction. The pair would turn bearish on a break below 106.95, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Speculative interest ignored encouraging Japanese data, as the country published the June Jibun Bank Services PMI, which recovered from 26.5 to 45. Also, China released the Caixin Services PMI, which unexpectedly surged to 58.4 from 55 in May, and against the 49.9 expected.” 

“The pair is stuck between directionless moving averages. The bearish case will be firmer on a break below 106.95, a Fibonacci support level.”

“The long-term perspective is neutral amid the safe-haven condition of both currencies. In the shorter-term, and according to the 4-hour chart, USD/JPY is also neutral but has the potential of falling further, as technical indicators remain within negative levels, with modest downward slopes.”