Low momentum readings have USD/JPY consolidating before the key Jackson Hole risk event. Unless the USD surmounts its long-term resistance levels at 111.66 and 112.40, the pair remains susceptible.
Most of the technical indicators still carry laggard bearish USD signals
“USD/JPY continues to hold below its key resistance marked at 111.66. Together with 112.40, these are key long-term resistance levels to break to forge a topside break.”
“Despite the ADX momentum indicator not indicative of trend intensity, both the relative strength index and moving average convergence divergence signals still work in favour for an interim lower USD.”
“USD/JPY has to consider the 38.2% Fibonacci retracement of the 102.59-111.66 range at 108.20, and just above that the Donchian Channel support at 108.72. The former should carry some significance given it converges with the 108.29 Ichimoku cloud support on the weekly charts. Without the clarity of guidance from Jackson Hole, USD is likely to respect these interim parameters.”
