USD/JPY: Resistance at 109.00 to cap further gains

The USD/JPY pair trades within familiar levels just below the 109.00 level, still unable to attract investors. According to FXStreet’s Analyst Valeria Bednarik, bulls would have to keep on waiting as sellers are defending the 109.00 level.

Japanese data missed expectations

“Japanese data published at the beginning of the day was generally discouraging. The April Corporate Service Price Index printed at 1% YoY, below the 1.5% expected. The March Leading Economic Index was confirmed at 102.5, below the previous estimate, which was downwardly revised. The Coincident Index for the same month came in at 93.”

“A couple of Federal Reserve officials are scheduled to speak. The latest FOMC Meeting Minutes have shown that some members are willing to discuss tapering in the upcoming meetings triggering speculation for a soon-to-come tighter monetary policy. However, speakers have tried to pour cold water on the matter ever since, repeating that they expect higher inflation to be temporary.”

“From a technical point of view, the upside remains limited for the USD/JPY pair. A daily descendant trend line coming from this month’s high at 109.78 provides resistance around the 109.00 level, where sellers have been appearing these last few days.”