FxWirePro: USD/JPY extends sideways grind, ignores mixed data, rising virus cases challenge market sentiment

USD/JPY chart - Trading View 

USD/JPY was extending sideways grind for the 3rd consecutive session as rising coronavirus cases across the U.S. dent market sentiment.

The major was trading 0.14% lower on the day at 105.28 at around 04:40 GMT, bias remains neutral.

Fundamental Analysis:

Moody’s Investors Services in a fresh credit review on Japan noted that Japan's debt burden is set to reach 230% of GDP in FY2020 due to coronavirus pandemic.

BOJ’s Adachi warns about the negative impact of the COVID-19 pandemic on the Japanese corporates while supporting the case for easy monetary policy.

Data Watch:

On the data front, Japan’s Producer Price Index (PPI) for October came in unchanged at -0.2% MoM and matched -2.1% forecasts on YoY. 

Meanwhile, the September month Machinery Orders recovered to -11.5% YoY from -15.2% prior and slightly better than -11.6% expected.

Looking forward, focus will be on U.S. headline inflation for October and the weekly Jobless Claims which could provide some impetus.

Technical Analysis:

Major trend in the pair is bearish, but minor trend has turned bullish with shift in near-term moving averages.

Price action is consolidating above 55-EMA. RSI has edged above 50 mark. The pair is struggling at stiff resistance at 105.50 (converged cloud top and falling trendline).

Failure at cloud resistance and break below 55-EMA will see downside resumption. On the flipside, breakout above daily cloud will carry the pair higher.

Support levels - 105.25 (55-EMA), 104.92 (5-DMA), 104.74 (20-DMA)

Resistance levels - 105.52 (Cloud top), 105.85 (110-EMA), 106.90 (200-DMA)