USD/JPY: Bears to gain ground on a break below 105.50

USD/JPY is trading lower in range this Tuesday, as the market keeps betting against the greenback. The pair fell to 105.58, now trading some 20 pips above such a low. Valeria Bednarik, Chief Analyst at FXStreet’s, sees USD/JPY poised to extend its decline, mainly on a break below 105.50.

Key quotes

“Japan published some encouraging figures at the beginning of the day, as the unemployment rate stayed steady at 2.9% in July against the 3.0% expected, while the August Jibun Bank Manufacturing PMI improved to 47.2 from 46.6. On a down note, Capital Spending declined 11.3% against a 4.3% advance expected.”

“The US session will bring the final version of the August Markit Manufacturing PMI, foreseen unchanged at 53.6. The country will also release the ISM Manufacturing PMI for the same month, seen at 54.4 from 54.2 in July.”

“According to the 4-hour chart, the USD/JPY pair is at risk of extending its decline, mainly on a break below 105.50, the immediate support. In the mentioned time-frame, the pair is trading below all of its moving averages, with a bearish 20 SMA capping advances. Technical indicators, in the meantime, offer modest bearish slopes within negative levels.”