Volatility has been lower so far on Monday and the USDJPY pair was trading without a significant daily change during the London session, hovering around the 111 handle.
Friday’s US GDP failed to spur any bigger movements and the greenback slid lower. The second quarter GDP came out at 4.1%, up from downwardly revised 2.0% in the first quarter. Analysts had expected 4.2%. The economic growth failed to reach consensus, but it’s the fastest pace since 2014. However, economists are predicting a slowdown in the next quarters.
There are no major data on the agenda today and therefore the current calm holiday trading could persist throughout the day.
The USDJPY pair dropped below the longer-term bullish trend line and the consolidation period has begun. The first resistance is now seen at previous highs around 111.40 and if broken, further upside movement could be seen toward the 112 mark.
Bulls will be defending the 110.50 support and if not held, the decline could target the 200 day moving average at the psychological level of 110.
Yields in the US picked up higher in the recent days, but the USDJPY failed to follow them and therefore a consolidation seems likely for the near future.
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