USD/JPY: Steeper slide below 109.15

The USD/JPY pair is trading at around 109.40, still correcting overbought conditions in the short-term after the Japanese economy contracted by 0.6% in the first quarter, Valeria bednarik, a Chief Analyst at FXStreet, reports.

Read: Japan's GDP Q1, QoQ: -0.6% vs -0.5% expected, yen stable

Key quotes

“Japan published its Q1 GDP which came in at -0.6% QoQ, missing the market’s expectations of -0.5% while the April’s Trade Balance posted a deficit of ¥966.5 billion and the Current Account for the same month shrank to ¥262.7 billion.” 

“The 4-hour chart shows that USD/JPY is holding above a bullish 20 SMA, as technical indicators retreat further within positive levels. The mentioned 20 SMA comes at 109.15, providing immediate support, with a steeper corrective decline expected once below this last. Bulls could take their chances on a recovery above 109.80.”