USD/JPY Forecast: Increased bearish potential, critical support at 104.95
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UPGRADEUSD/JPY Current price: 105.46
- Japan’s National inflation remained subdued in January at -0.6% YoY.
- Speculative interest sold the greenback despite higher US Treasury yields.
- USD/JPY is at risk of falling further, immediate support at 105.30.
The USD/JPY pair fell on Friday for a third consecutive day, trimming half of its weekly gains. The dollar’s broad weakness was behind the slump, with speculative interest ignoring US Treasury yields rallying to one-year highs. Meanwhile, equities traded with a mixed tone. The DJIA held near record highs, but the S&P edged lower.
Japan published the January National inflation, which came in at -0.6% YoY, while the core reading also printed at -0.6%, better than expected. The country released the Jibun Bank Manufacturing PMI, which improved in February to 50.6, according to preliminary estimates. Japan will publish this Monday the January Corporate Service Price Index, foreseen at -1.1%, down from .0.4% previously.
USD/JPY short-term technical outlook
The USD/JPY pair trades in the 105.4o price zone and is at risk of falling further. In the daily chart, the pair is below its 200 SMA, but above a bullish 20 SMA which provides dynamic support around 104.90. Technical indicators retreated sharply from overbought levels but remain above their midlines. In the 4-hour chart, the risk of a steeper decline is cleared, as technical indicators plunged remain well into negative levels, with the Momentum heading firmly south and the RSI stable at around 44.
Support levels: 105.30 104.95 104.50
Resistance levels: 105.80 106.20 106.55
USD/JPY Current price: 105.46
- Japan’s National inflation remained subdued in January at -0.6% YoY.
- Speculative interest sold the greenback despite higher US Treasury yields.
- USD/JPY is at risk of falling further, immediate support at 105.30.
The USD/JPY pair fell on Friday for a third consecutive day, trimming half of its weekly gains. The dollar’s broad weakness was behind the slump, with speculative interest ignoring US Treasury yields rallying to one-year highs. Meanwhile, equities traded with a mixed tone. The DJIA held near record highs, but the S&P edged lower.
Japan published the January National inflation, which came in at -0.6% YoY, while the core reading also printed at -0.6%, better than expected. The country released the Jibun Bank Manufacturing PMI, which improved in February to 50.6, according to preliminary estimates. Japan will publish this Monday the January Corporate Service Price Index, foreseen at -1.1%, down from .0.4% previously.
USD/JPY short-term technical outlook
The USD/JPY pair trades in the 105.4o price zone and is at risk of falling further. In the daily chart, the pair is below its 200 SMA, but above a bullish 20 SMA which provides dynamic support around 104.90. Technical indicators retreated sharply from overbought levels but remain above their midlines. In the 4-hour chart, the risk of a steeper decline is cleared, as technical indicators plunged remain well into negative levels, with the Momentum heading firmly south and the RSI stable at around 44.
Support levels: 105.30 104.95 104.50
Resistance levels: 105.80 106.20 106.55
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