USD/JPY Forecast: Bulls still determined to push it higher
|USD/JPY Current price: 110.15
- Equities are on the rise as central banks cooled down panic selling.
- US Treasury yields depressed but well above weekly lows.
- USD/JPY corrected extreme overbought conditions, holds on to bullish ground.
The USD/JPY pair reached a fresh monthly high of 111.35 during Asian trading hours, as the greenback maintained its positive momentum. Wall Street closed in the green, leading equities higher in the session, although Japanese markets were closed amid a local holiday. Demand for the greenback receded as speculative interest returned to high-yielding stocks, resulting in USD/JPY retreating to 109.93. Still, the pair is now above 110.00, as the financial world struggles for some stability.
US Treasury yields are depressed, marginally lower ahead of the American session but far from weekly lows. Also, underpinning the market’s mood, crude oil prices are on frank recovery, with the barrel of WTI at $27.60 after flirting with $20.00 earlier this week.
The dollar eases, equities surge, as the massive injections of liquidity from all of the central banks from major economies have poured some cold water on coronavirus-related panic. The outbreak, however, continues, and the crisis could extend into early May.
USD/JPY short-term technical outlook
The USD/JPY pair is technically bullish, as the intraday slide helped it correct extreme overbought conditions in the short-term. The 4-hour chart shows that it held above all of its moving averages, with the 20 SMA maintaining its bullish slope above its 100 and 200 SMA. Technical indicators are aiming to resume their advances, holding well into positive territory. Further gains are to be expected on a break above 110.30, the immediate resistance, with the market pushing for a re-test of 112.22, February monthly high.
Support levels: 108.90 108.45 108.00
Resistance levels: 110.30 110.65 111.10
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