USD/JPY Forecast: Heading towards 107.70
|USD/JPY Current Price: 108.43
- Dismal US data and the Fed’s announcing more easing weighed on the dollar.
- US Treasury yields edged marginally lower, adding pressure on the pair.
- USD/JPY has turned bearish in the short-term, steeper decline foreseen once below 107.70.
The USD/JPY pair fell to 108.20, its lowest for the week, amid the dollar’s broad weakness, and despite Wall Street posted substantial gains. A mixture of weak American data and the US Federal Reserve announcing another round of facilities weighed on the greenback. US Treasury yields eased, with the yield on the 10-year note currently at 0.72% and adding pressure on the pair.
At the beginning of the day, BOJ’s Governor Kuroda spoke at a BOJ branch manager's meeting and refereed to the current global crisis, indicating that policymakers won’t hesitate to add easing if necessary. Japan will release March Producer Price Index and Bank Lending for the same month during the upcoming Asian session.
USD/JPY short-term technical outlook
The USD/JPY pair has trimmed all of its weekly gains ahead of the Asian opening and has turned bearish in the short-term. The 4-hour chart shows that the pair has moved below its 20 and 100 SMA, which remain a few pips below the 23.6% retracement of its latest daily advance. Technical indicators have moved into negative territory, although the bearish strength is limited at the time being. The next relevant support is 107.70, the 38.2% retracement of its latest bullish run.
Support levels: 108.00 107.70 107.25
Resistance levels: 108.65 109.00 109.40
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