USD/JPY Forecast: Consolidating gains above 109.00
|USD/JPY Current price: 109.34
- Japan’s Leading Economic Index rebounded in September, according to preliminary estimates.
- US November Michigan Consumer Sentiment Index foreseen at 95.9 from 95.5.
- USD/JPY heading toward 110.00, depending on risk perception.
The USD/JPY pair consolidates weekly gains in the 109.30 price zone, having eased just modestly from a fresh multi-month high of 109.48. Market players remain hopeful that the US and China will soon sign a trade arrangement. The stakes are high at this point, and both economies seem to be escalating demands ahead of it.
Upbeat data and positive sentiment
Wall Street reached record highs Thursday, although the appetite for high-yielding assets receded overnight, with Asian equities struggling with their opening levels and European ones now trading marginally lower. Government debt yields, however, remain near weekly highs.
Japanese data were generally encouraging, as the country released September Labor Cash Earnings, up by 0.8% YoY and Overall Household Spending, up by 9.5% in the same period. Also, the preliminary estimate of the September Leading Economic Index was up to 92.2 from 91.9, while the Coincident Index increased to 101 from 99.
The US session will bring the preliminary estimate for the November Michigan Consumer Sentiment Index, seen at 95.9 from the previous 95.5.
USD/JPY short-term technical outlook
The short-term picture for the USD/JPY pair is bullish, as long as buyers continue to defend the 109.00 level. In the 4-hour chart, the pair is developing above all of its moving averages, with the 20 SMA heading north above the larger ones at around 109.05. Technical indicators have lost directional strength but hold within positive levels, indicating absent selling interest.
Support levels: 109.00 108.65 108.20
Resistance levels: 109.60 110.00 110.40
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