USD/JPY Forecast: Bulls waiting for a reason to resume buying
|USD/JPY Current Price: 110.16
- Japanese Industrial Production fell in November, keeping the yen on the downside.
- Bank of Japan expected to repeat the same monetary policy message.
- USD/JPY ready to resume its advance, immediate resistance at 110.40.
The USD/JPY pair was lifeless throughout this Monday, confined to a tight 15 pips range in the 110.10/20 price zone. Demand for the greenback offset any positive effect the poor performance of equities could have had. A holiday in the US exacerbated range-trading around the pair after Asian and European indexes closed mixed.
In the data front, Japan released November Industrial Production, which fell by 1.0% when compared to the previous month, and by 8.2% when compared to a year earlier. Capacity Utilization in the same period declined by 0.3%, all of them missing the market’s expectations. This Tuesday, the Bank of Japan will have a Monetary Policy meeting. There will be a press conference as the central bank will also release its Outlook Report. Nevertheless, it is expected to be a non-event, as Kuroda will hardly make a change to the current policy.
USD/JPY short-term technical outlook
The USD/JPY pair is in a consolidative phase, although the fact that it holds near multi-month highs maintains the risk skewed to the upside. In the 4-hour chart, the 20 SMA maintains a moderated bullish slope just below the current level, providing dynamic support and far above the larger ones. Technical indicators, in the meantime, remain flat, the Momentum around its 100 level and the RSI at around 70.
Support levels: 110.00 109.70 109.35
Resistance levels: 110.40 110.75 111.05
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