USD/JPY Forecast: Bulls could push back towards 111.00
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UNLOCK OFFERUSD/JPY Current price: 109.66
- Record highs in Wall Street and subdued government bond yields kept the pair afloat.
- Dovish comments from Fed’s chief Powell cooled expectations for higher inflation.
- USD/JPY corrected extreme overbought conditions, could resume its advance.
The USD/JPY pair recovered on Friday, ending the week in the red at 109.65. The pair reached a daily high of 109.95, as US Treasury yields advanced intraday, with the yield on the 10-year note reaching 1.687%, but later retreating to 1.66%. Substantial gains in US equities maintained the pair in the green ahead of the weekly close. Dovish comments from US Federal Reserve chief Jerome Powell cooled expectations of higher inflation in the US.
At the beginning of the week, Japan will publish the March Producer Price Index, foreseen up 0.4% MoM and 0.5% YoY, and Machine Tool Orders for the same month, previously at 36.7% MoM.
USD/JPY short-term technical outlook
The daily chart for the USD/JPY pair suggests that the latest decline from near 111.00 may have been just corrective and that bulls retain control. The pair settled above a now flat 20 DMA, while it is still developing far above the longer ones. Technical indicators have corrected extreme overbought conditions and bounced back from around their midlines. In the near term, and according to the 4-hour chart, the pair hovers around converging 20 and 100 SMAs, while technical indicators are directionless within neutral levels.
Support levels: 109.50 109.00 108.65
Resistance levels: 109.95 110.30 110.75
USD/JPY Current price: 109.66
- Record highs in Wall Street and subdued government bond yields kept the pair afloat.
- Dovish comments from Fed’s chief Powell cooled expectations for higher inflation.
- USD/JPY corrected extreme overbought conditions, could resume its advance.
The USD/JPY pair recovered on Friday, ending the week in the red at 109.65. The pair reached a daily high of 109.95, as US Treasury yields advanced intraday, with the yield on the 10-year note reaching 1.687%, but later retreating to 1.66%. Substantial gains in US equities maintained the pair in the green ahead of the weekly close. Dovish comments from US Federal Reserve chief Jerome Powell cooled expectations of higher inflation in the US.
At the beginning of the week, Japan will publish the March Producer Price Index, foreseen up 0.4% MoM and 0.5% YoY, and Machine Tool Orders for the same month, previously at 36.7% MoM.
USD/JPY short-term technical outlook
The daily chart for the USD/JPY pair suggests that the latest decline from near 111.00 may have been just corrective and that bulls retain control. The pair settled above a now flat 20 DMA, while it is still developing far above the longer ones. Technical indicators have corrected extreme overbought conditions and bounced back from around their midlines. In the near term, and according to the 4-hour chart, the pair hovers around converging 20 and 100 SMAs, while technical indicators are directionless within neutral levels.
Support levels: 109.50 109.00 108.65
Resistance levels: 109.95 110.30 110.75
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