USD/JPY: Bullish potential limited

Japan’s Q1 GDP indicated the country has fallen into recession. Meanwhile, USD/JPY is hovering just below the 23.6% retracement of its latest daily advance at 107.33, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Japan has fallen into recession, according to the Q1 GDP estimate, which anyway was better than anticipated. The economy contracted by 0.9% in the three months to March, and by 3.4% when compared to the first quarter of 2019.” 

“The 4-hour chart shows that the USD/JPY pair continues to develop between mild-bearish 100 and 200 SMA, while technical indicators stand flat above their mid-lines.” 

“USD/JPY is neutral and with limited bullish potential, as it would need to break above 107.70 to become more attractive for bulls.”