USD/JPY Forecast: Lower in range as caution prevails
|USD/JPY Current price: 108.47
- Global trade developments closely watched ahead of central banks’ meetings.
- The US, Canada, and Mexico are working on the USMCA trade deal.
- USD/JPY at risk of falling further on a break below 108.40, the immediate support.
The market is on risk-off mode this Tuesday, running away from high-yielding equities and with the American dollar weakening against most major rivals. The USD/JPY pair is trading at around 108.60, little changed from Monday’s close.
The market’s attention is focused on global trade developments, with the US and China still working on a trade deal, and US President Trump made as usual encouraging tweets, while representatives from the US and Canada will fly to Mexico today to work on the final stages of the North American trade deal, know as USMCA.
Also, the US Federal Reserve is scheduled to unveil its latest monetary policy decision this Wednesday, while the ECB will do the same on Thursday. Such upcoming events exacerbate the cautious mood.
USD/JPY short-term technical outlook
The USD/JPY pair is trading lower in range, capped, in the 4-hour chart, by a bearish 20 SMA that extends its decline below the larger ones. Technical indicators are neutral-to-bearish within negative levels, keeping the risk skewed to the downside. To confirm additional declines, the pair needs to break below 108.40, the immediate support. Sellers wait around 109.00 in the unlikely case of an upward movement.
Support levels: 108.40 108.10 107.75
Resistance levels: 108.70 109.00 109.30
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