FxWirePro: USD/JPY trades comatose within daily cloud, yen under pressure as GDP data confirms recession in Japan

USD/JPY chart - Trading View 

USD/JPY trade confined to narrow range with daily cloud, techs fail to provide clear directional bias.

The major was trading largely muted at around 107.13 at around 04:45 GMT, with session high at 107.28 and low at 107.06.

JPY remains under pressure as Japan has officially entered a recession with the consecutive quarterly economic contractions. 

Data released earlier today showed Japan’s economy contracted at an annualized rate of 3.4% in Q1 following a revised 7.3% contraction in Q4 of 2019. 

The pair edged lower from session highs at 107.28 as renewed friction between the United States and China over the virus outbreak keep have demand for the yen. 

Technical indicators are inconclusive. However, major trend remains bearish. Break below 200H MA (106.87) will see weakness.

Price action is extending sideways along 21-EMA and holding above Tenkan Sen. Breakout above daily cloud will support gains till 200-DMA (108.24).

On the data front, FOMC minutes (Wed 18:00 GMT), U.S. Jobless Claims (Thurs 12:30 GMT) and Japan Inflation data (Thus 23:30 GMT) will be catalysts for price action.

Major Support Levels: 

• S1: 106.87 (200H MA)
• S2: 106.44 (50% Fib)
• S3: 105.98 (May 6th low)

Major Resistance Levels: 

• R1: 107.30 (Cloud top)
• R2: 107.68 (55-EMA)
• R3: 108.10 (110-EMA)

Summary: Major trend is bearish. Breakout above 55-EMA could change near-term dynamics.