USD/JPY recovering but faces resistance below 134.00

• US dollar gains momentum at the end of the week.
• USD/JPY still down for the week but above critical support.
• US Consumer Confidence rises above expectations in August.

The USD/JPY pair is up on Friday, supported by a stronger US dollar against G10 currencies – it is about to end the week moving in a range between 133.90 and 133.45.

The yen gained momentum during the American session amid a mixed performance in Wall Street. The dollar remained in positive, after Thursday’s surge in Treasury yields and also supported by economic data.

Data released on Friday showed US Consumer Confidence recovered in August and this supported USD/JPY. University of Michigan’s main index rose to 55.1, above the 51.1 of July and surpassing the 52.5 of market consensus. The report also showed a decline in 1-year inflation expectations.

Down for the week but off lows

Despite Friday’s gains, USD/JPY is about to end the week in negative territory, although far from the low. The weekly chart shows the uptrend still in place, but with no momentum.

The correction from the multi-decade high near 140.00, reached about a month ago, continues to find support around 131.00. The 131.00 zone is a critical horizontal support area and also contains the 21-day Simple Moving Average. A weekly close below would open the doors do more losses.

USD/JPY weekly chart