USD/JPY Forecast: Bearish pressure mounts as risk-on prevails
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UPGRADEUSD/JPY Current price: 108.68
- US Treasury yields remain depressed at the lower end of their weekly range.
- Upbeat European data fueled demand for high-yielding assets and hurt the greenback.
- USD/JPY is technically bearish and could lose the 108.00 mark.
The American currency keeps falling heading into the weekly close, with USD/JPY trading near its weekly low in the 108.60 price zone. Upbeat European and UK data fueled demand for high-yielding assets, to the detriment of the greenback. Meanwhile, government bond yields remain at the lower end of their weekly range. The yield on the US 10-year Treasury note hovers around 1.62%.
Data wise, Japanese annual inflation printed at -0.4% Yo in April as expected. The core reading, which excludes fresh food prices, came in at -0.1%, slightly better than anticipated. The preliminary estimate of the May Jibun Bank Manufacturing PMI printed at 52.5, below the 53.8 expected and the previous 53.6.
The US session will bring the preliminary estimate of the Markit Manufacturing PMI for May, foreseen at 60.2, and the Services PMI for the same period, expected at 64.5, both slightly below the April final readings.
USD/JPY short-term technical outlook
The USD/JPY pair is at risk of falling further in the near-term. The 4-hour chart shows that the price fell further below its moving averages, with the 20 SMA gaining bearish traction and crossing below the longer ones. Technical indicators remain within negative levels, with limited bearish strength. The decline will likely accelerate should the pair break below 108.56, the immediate support.
Support levels: 108.55 108.20 107.80
Resistance levels: 109.00 109.30 109.80
View Live Chart for the USD/JPY
USD/JPY Current price: 108.68
- US Treasury yields remain depressed at the lower end of their weekly range.
- Upbeat European data fueled demand for high-yielding assets and hurt the greenback.
- USD/JPY is technically bearish and could lose the 108.00 mark.
The American currency keeps falling heading into the weekly close, with USD/JPY trading near its weekly low in the 108.60 price zone. Upbeat European and UK data fueled demand for high-yielding assets, to the detriment of the greenback. Meanwhile, government bond yields remain at the lower end of their weekly range. The yield on the US 10-year Treasury note hovers around 1.62%.
Data wise, Japanese annual inflation printed at -0.4% Yo in April as expected. The core reading, which excludes fresh food prices, came in at -0.1%, slightly better than anticipated. The preliminary estimate of the May Jibun Bank Manufacturing PMI printed at 52.5, below the 53.8 expected and the previous 53.6.
The US session will bring the preliminary estimate of the Markit Manufacturing PMI for May, foreseen at 60.2, and the Services PMI for the same period, expected at 64.5, both slightly below the April final readings.
USD/JPY short-term technical outlook
The USD/JPY pair is at risk of falling further in the near-term. The 4-hour chart shows that the price fell further below its moving averages, with the 20 SMA gaining bearish traction and crossing below the longer ones. Technical indicators remain within negative levels, with limited bearish strength. The decline will likely accelerate should the pair break below 108.56, the immediate support.
Support levels: 108.55 108.20 107.80
Resistance levels: 109.00 109.30 109.80
View Live Chart for the USD/JPY
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