USD/JPY Forecast: Holding on to gains despite a weaker greenback
|USD/JPY Current Price: 111.67
- Dollar’s weakness offset by equities soaring worldwide, USD/JPY pressuring highs.
- Japan’s manufacturing activity contracted by more than expected in March.
- USD/JPY retains its bullish stance, still poised to re-test its yearly high.
The USD/JPY pair has maintained its bullish stance, ending the day with gains although within familiar levels. The pair advanced up to 111.69, surpassing its previous high by a couple of pips, recovering from a daily low of 110.07. The mentioned low was the result of the market rushing away from the greenback amid Fed’s massive QE bringing some relief to market players. Substantial gains in global equities underpinned the pair since London’s opening.
In the data front, Japan released the March preliminary Jibun Bank Manufacturing PMI, which came in at 44.8, worse than the previous 47.8 and the expected 47.6. The January Leading Economic Index was upwardly revised to 90.5, while the Coincident Index for the same month was revised to 95.2, also above the previous estimate.
USD/JPY short-term technical outlook
The USD/JPY pair has posted a higher high and a higher low for the seventh consecutive day, although it’s struggling to extend gains beyond the 111.50/60 price zone. In the 4-hour chart, the pair has continued to find support in a bullish 20 SMA, which advances above the larger ones. Technical indicators hold within positive levels, although losing their upward strength. Still, the risk is skewed to the upside, with scope to re-test the yearly high at 112.22.
Support levels: 111.05 110.70 110.20
Resistance levels: 111.60 111.90 112.25
View Live Chart for the USD/JPY
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