USD/JPY Forecast: At the lower end of the weekly range
|USD/JPY Current price: 107.42
- Risk-off paused, but the pandemic-related crisis remains the same.
- US employment data in focus as the weekly unemployment claims expected to skyrocket.
- USD/JPY upside contained by a critical Fibonacci resistance at 107.70.
The USD/JPY pair trades at the lower end of its weekly range, having traded as low as 106.91 this Thursday, amid the dismal market mood that reigned on Wednesday. The pair later recovered amid the better performance of equities, indicating a pause in risk-off. The advance, however, stalled at 107.56, with USD/JPY now trading around 107.40. Weighing on the pair, US Treasury yields are falling, with the yield on the benchmark 10-year note at 0.59%.
The focus now shifts to US employment data. The country will release unemployment claims for the week ended March 27, and the number is once again expected to break stats. After printing at 3.28M in the previous week, the market foresees 3.5M for this week. Indeed, several states have changed the rules about claiming for unemployment insurance, allowing those in lockdown to claim for help. And while the numbers may be distorted by the ongoing crisis, the fact is that the spending related to unemployment is out of charts.
USD/JPY short-term technical outlook
The USD/JPY pair is trading below the 38.2% retracement of its latest bullish run at 107.70, the immediate resistance. In the 4-hour chart, it is developing below all of its moving averages, which anyway lack directional strength. Technical indicators, in the meantime, remain within negative levels, although without clear direction. Overall, the risk is skewed to the downside, although there’s no technical confirmation just yet.
Support levels: 107.10 106.80 106.35
Resistance levels: 107.70 108.00 108.35
View Live Chart for the USD/JPY
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