USD/JPY: Bullish potential remains limited

The greenback extends its Tuesday advance against most major rivals, and USD/JPY trades at weekly highs in the 106.10 price zone. The pair could extend its advance once beyond 106.35, but chances are still limited, according to FXStreet’s Chief Analyst Valeria Bednarik.

Key quotes

“Japan’s Chief Cabinet Secretary Yoshihide Suga announced his bid to replace PM Abe. Suga is among the favorite candidates towards the election vote next September 14. Should he be elected the next Prime Minister, the most likely scenario is that he will continue the current policy.”

“The 4-hour chart shows that USD/JPY trades a few pips above its moving averages, which anyway remain confined to a tight range and with the 20 SMA heading lower below the larger ones. Technical indicators, in the meantime, hold within positive levels, although turning lower, indicating limited buying interest.” 

“The USD/JPY pair could gain upward traction once above 106.35, the immediate resistance, with room then for an approach to the 107.00 price zone.”