USD/JPY Forecast: Cautious optimism plays against the greenback
|USD/JPY Current price: 109.03
- Hopes that the pandemic is starting to slowdown keeps boosting the market’s sentiment.
- Japan Leading Economic Index improved in February according to preliminary estimates.
- USD/JPY neutral-to-bullish in the short-term needs to advance beyond 109.40.
The American dollar continues to ease against most major rivals, as the market’s mood keeps improving. Hopes that the coronavirus pandemic is starting to slow down are behind the latest movements, amid improving numbers in the larger focus of contagion. The numbers, however, are still outrageous, with the number of global cases above 1.35M and roughly 75K deaths.
The USD/JPY pair trades lower in range, as, opposing to the dollar’s broad weakness, equities and yields are substantially up. Asian and European equities advance after Wall Street rallied on Monday, while the yield on the 10-year Treasury note jumped to 0.75%. Japan published overnight the preliminary estimate of the February Leading Economic Index, which came in at 92.1, beating the market’s forecast. The Coincident Index for the same month was also better than anticipated, rising to 95.8. The US macroeconomic calendar has nothing relevant to offer today.
USD/JPY short-term technical outlook
The USD/JPY pair is consolidating just below the 23.6% retracement of its latest daily advance at around 109.20 The 4-hour chart shows that it’s neutral-to-bullish, as it continues to develop a few pips above a congestion of moving averages. Technical indicators are aiming marginally higher within positive levels, but below their daily highs and without momentum enough. The pair would need to extend its advance past Monday’s high of 109.38 to gather additional strength and be able to approach the 110.00 area.
Support levels: 108.65 108.25 107.90
Resistance levels: 109.40 109.80 110.15
View Live Chart for the USD/JPY
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