USD/JPY: Positive stocks performance limits the downside potential

The USD/JPY pair is neutral-to-bearish, trading just below the 107.00 level, as stocks offset chances of a decline while Japanese core inflation missed the market’s expectations, Valeria Bednarik, Chief Analyst at FXStreet, informs.

Key quotes 

“Japan published the May National CPI, which came in at 0.1% YoY. The core reading, which excludes fresh food, however, fell to -0.2%, below the -0.1% expected. The US won’t release macroeconomic data this Friday, but Fed’s head Powell is set to offer a speech.”

“The 4-hour chart shows that the 20 SMA continues heading south above the current level and below the larger moving averages, providing dynamic resistance. Technical indicators, in the meantime, remain directionless, but within negative levels.”

“Given the positive tone of equities, a downward move seems unlikely for the upcoming sessions, although the upside is also limited, particularly if the pair remains below 107.30.”