USD/JPY Forecast: Bullish potential limited by sellers aligned around 106.45
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UNLOCK OFFERUSD/JPY Current Price: 106.01
- Coronavirus resurgence dampening the pace of the US economic momentum, according to Fed’s Barkin.
- Japan’s Q2 Gross Domestic Product at -0.6% QoQ, in line with previous estimates.
- USD/JPY regained the 106.00 level amid appetite for high-yielding assets.
The robust performance of equities and a firmer dollar have helped USD/JPY to recover some ground at the beginning of the week. The pair traded as high as 106.46, now comfortably trading around 106.00. Speculative interest moved into high-yielding assets at the beginning of August, with no particular reason behind the move. In fact, the usual concerns related to the future of major economies remain firmly in the background. Richmond Fed President Thomas Barkin said that coronavirus resurgence is dampening the pace of the US economic momentum and the path of the economy depends critically on the path of the virus.
In the data front, Japan published the Q2 GDP, which came in at -0.6% QoQ, matching the previous estimate. Also, the July Jibun Bank Manufacturing PMI was out at the beginning of the day, bouncing from 42.6 to 45.2, beating expectations. Early Tuesday, the country will publish July Tokyo inflation, foreseen at 0.4% YoY. The core reading, which excludes fresh-food prices, is foreseen at 0.2% YoY, unchanged from the previous monthly figure.
USD/JPY short-term technical outlook
The USD/JPY pair is up for a second consecutive day, although its bullish potential seems limited. The daily chart shows that the pair met sellers around a bearish 20 DMA, while in the 4-hour chart, the pair has the 100 DMA around its daily highs. In this last time-frame, technical indicators have eased just modestly from intraday highs, holding well into positive levels, somehow anticipating another leg higher on a clear advance beyond the 105.45 price zone.
Support levels: 105.90 105.55 105.20
Resistance levels: 106.45 106.90 107.20
USD/JPY Current Price: 106.01
- Coronavirus resurgence dampening the pace of the US economic momentum, according to Fed’s Barkin.
- Japan’s Q2 Gross Domestic Product at -0.6% QoQ, in line with previous estimates.
- USD/JPY regained the 106.00 level amid appetite for high-yielding assets.
The robust performance of equities and a firmer dollar have helped USD/JPY to recover some ground at the beginning of the week. The pair traded as high as 106.46, now comfortably trading around 106.00. Speculative interest moved into high-yielding assets at the beginning of August, with no particular reason behind the move. In fact, the usual concerns related to the future of major economies remain firmly in the background. Richmond Fed President Thomas Barkin said that coronavirus resurgence is dampening the pace of the US economic momentum and the path of the economy depends critically on the path of the virus.
In the data front, Japan published the Q2 GDP, which came in at -0.6% QoQ, matching the previous estimate. Also, the July Jibun Bank Manufacturing PMI was out at the beginning of the day, bouncing from 42.6 to 45.2, beating expectations. Early Tuesday, the country will publish July Tokyo inflation, foreseen at 0.4% YoY. The core reading, which excludes fresh-food prices, is foreseen at 0.2% YoY, unchanged from the previous monthly figure.
USD/JPY short-term technical outlook
The USD/JPY pair is up for a second consecutive day, although its bullish potential seems limited. The daily chart shows that the pair met sellers around a bearish 20 DMA, while in the 4-hour chart, the pair has the 100 DMA around its daily highs. In this last time-frame, technical indicators have eased just modestly from intraday highs, holding well into positive levels, somehow anticipating another leg higher on a clear advance beyond the 105.45 price zone.
Support levels: 105.90 105.55 105.20
Resistance levels: 106.45 106.90 107.20
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