While USD/JPY remains above the 109.00 level, upside momentum appears to be diminishing, as the pair is currently trading at 109.14, a loss of 0.15% from Thursday’s North American close.
In addition, the Stochastic appears to be turning lower on a daily basis, signaling the recent move to the upside may have run its course.
In today’s trading, it was reported that the Markit/Nikkei final manufacturing purchasing managers’ index (PMI) came in at 52.8 in April, up from a final March estimate of 52.4. This was the 8th consecutive month Japan’s PMI was above 50, a signal of sustained expansion.
Support on a further move to the downside is at the 108.00 level, which was derived from the breakdown from the sideways trading range that took place in March. The pair came down to within reach of this level on April 17th, with a move to 108.13
On a continued decline, the next area of support does not come into play until the high established in late October, near the 105.50 level.
In the US today, Existing Home Sales will be reported at 10:00 ET.
USD/JPY Daily Chart