FxWirePro: USD/JPY extends weakness for the second straight session, eyes 21-EMA support at 134.17

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY was trading 0.63% lower on the day at 134.81 at around 06:10 GMT

Previous Week's High/ Low: 136.71/ 134.26

Previous Session's High/ Low: 136.81/ 135.54

Fundamental Overview:

Downbeat US personal spending and softer prints of the Fed’s preferred inflation gauge on Thursday, raised concerns over the economic health and drowned the US dollar.

US CORE Personal Consumption Expenditure (PCE) Price Index printed in line with the expectations of 4.7% but lower than the prior release of 4.9%.

On the other side, data released by the Statistics Bureau of Japan showed Japan jobless rate rose to 2.6%, higher than the estimates and the prior print of 2.5%. 

Further, the Jobs/Applicants ratio has improved to 1.24, higher than the former print of 1.23 and remains in line with the consensus of 1.24.

Tokyo inflation rate has remained in a mid of estimates and the prior print of 2.2% and 2.4% respectively. A sustained inflation rate buoys well for the yen bulls.

Focus now on the US ISM PMI. Analysts expect the economic data may fall to 55 from the prior release of 56.1. Underperformance may weigh on the dollar. 

Technical Analysis:

- USD/JPY is extending weakness below 5-DMA

- Bearish RSI divergence adds to the downside bias

- Price action has slipped below 200H MA and GMMA indicator has turned bearish on the intraday charts

- MACD confirms bearish crossover on signal line, Chikou span is biased lower 

Major Support and Resistance Levels:

Support - 134.18 (21-EMA), Resistance - 135.75 (5-DMA)

Summary: USD/JPY trades with a bearish bias. The pair is on track to test 21-EMA at 134.18.