USD/JPY Forecast: Easing within range, yen’s demand limited
|USD/JPY Current Price: 111.27
- Japanese policymakers are concerned about a steeper economic stagnation.
- Soaring equities weighed on the American dollar but also kept the yen in check.
- USD/JPY losing bullish potential in the short-term, corrective decline possible.
The USD/JPY pair has spent the day consolidating above the 111.00 figure, unable to extend its gains beyond the weekly high at 111.70. It slid during US trading hours, as equities momentum weighed on the American currency. At the beginning of the day, the Bank of Japan published the Summary of Opinions, focused on the need for strengthening monetary stimulus amid the ongoing coronavirus crisis. Policymakers are concerned that the country could plunge into deep economic stagnation, despite the latest measures announced, and don’t expect a rebound once the virus is contained. The Japanese macroeconomic calendar has nothing of relevance to offer this Thursday.
USD/JPY short-term technical outlook
The USD/JPY pair is trading in the 111.20 price zone, losing its bullish strength. In the 4-hour chart, the pair is anyway holding above a mild-bullish 20 SMA, although technical indicators keep easing within positive levels. The risk of a steeper decline is limited, as, given the upbeat sentiment, the yen’s demand will likely remain limited. Still, the pair could extend its decline in the short-term, particularly if it losses the 111.00 threshold.
Support levels: 111.00 110.70 110.20
Resistance levels: 111.60 111.90 112.25
View Live Chart for the USD/JPY
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