USD/JPY Forecast: Correcting higher, far from changing the bearish bias
|USD/JPY Current price: 108.71
- Japan’s Jibun Bank Services PMI returned to expansion territory in November.
- US ADP employment survey and the ISM Non-Manufacturing PMI coming next.
- USD/JPY would need to recover beyond 109.30 to change its negative stance.
Trade-related headlines continue to dominate the market’s mood and to determine the dollar’s direction. The American currency remained under pressure through the first session of the day, although it seems now to be finding some demand, as news agencies reported that the US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal. The USD/JPY pair bottomed at 108.42, now trading some 30 pips above such a low, maintaining its bearish stance despite correcting higher.
Japan released the Jibun Bank Services PMI for November, which improved by less than anticipated up to 50.3 from 49.7, anyway back in expansion territory. The US will release the ADP employment survey for November, foreseen at 140K, and the ISM Non-Manufacturing PMI for the same month, expected at 54.5 against the previous 54.7.
USD/JPY short-term technical outlook
From a technical point of view, the USD/JPY pair is at risk of falling further, with the latest advance seen as a due correction. In the 4-hour chart, the pair is developing below all of its moving averages, with the 20 SMA accelerating its slump, as technical indicators remain directionless well into negative ground, after barely correcting extreme oversold readings. The recovery could continue should the pair accelerate through 108.80, the immediate resistance, but would need to extend gains beyond 109.30 to lose the bearish stance, quite unlikely at the time being.
Support levels: 108.40 108.10 107.75
Resistance levels: 108.80 109.30 109.60
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.