USD/JPY Forecast: Modest bounce from 108.00 suggests further declines ahead
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UNLOCK OFFERUSD/JPY Current price: 108.13
- US Treasury yields managed to post a modest intraday advance.
- Japan’s trade balance surprised in March posting a surplus of ¥663.7 billion.
- USD/JPY consolidates near monthly lows at around 108.10.
The broad dollar’s sell-off resulted in USD/JPY testing 108.00 during the European session, holding nearby as the day came to an end. The pair got to bounce just modestly after Wall Street’s opening, but retreated from the 108.30 level, as US indexes turned south quickly after posting fresh all-time highs. Meanwhile, US Treasury yields seesawed between gains and losses, to end the day with modest gains. The yield on the 10-year Treasury note hit 1.61%
Japan published the March Merchandise Trade Balance Total, which posted a wider-than-anticipated surplus of ¥663.7 billion, as exports soared 16.1% while imports increased 5.7%. February Industrial Production was down 2% YoY, slightly better than expected, while Capacity Utilization fell 2.8% vs an expected 3.2% advance. Early on Tuesday, the country will publish the February Tertiary Industry Index, previously at -1.7% MoM
USD/JPY short-term technical outlook
The USD/JPY pair stabilized around 108.10 and maintains its bearish stance. The 4-hour chart shows that the pair settled well below a bearish 20 SMA, which heads firmly lower below the longer ones. Technical indicators have stabilized near daily lows, the Momentum within negative levels and the RSI at around 23. The risk remains skewed to the downside, with a break below 108.00, opening the door for a steeper slide.
Support levels: 108.00 107.65 107.20
Resistance levels: 108.35 108.70 109.10
USD/JPY Current price: 108.13
- US Treasury yields managed to post a modest intraday advance.
- Japan’s trade balance surprised in March posting a surplus of ¥663.7 billion.
- USD/JPY consolidates near monthly lows at around 108.10.
The broad dollar’s sell-off resulted in USD/JPY testing 108.00 during the European session, holding nearby as the day came to an end. The pair got to bounce just modestly after Wall Street’s opening, but retreated from the 108.30 level, as US indexes turned south quickly after posting fresh all-time highs. Meanwhile, US Treasury yields seesawed between gains and losses, to end the day with modest gains. The yield on the 10-year Treasury note hit 1.61%
Japan published the March Merchandise Trade Balance Total, which posted a wider-than-anticipated surplus of ¥663.7 billion, as exports soared 16.1% while imports increased 5.7%. February Industrial Production was down 2% YoY, slightly better than expected, while Capacity Utilization fell 2.8% vs an expected 3.2% advance. Early on Tuesday, the country will publish the February Tertiary Industry Index, previously at -1.7% MoM
USD/JPY short-term technical outlook
The USD/JPY pair stabilized around 108.10 and maintains its bearish stance. The 4-hour chart shows that the pair settled well below a bearish 20 SMA, which heads firmly lower below the longer ones. Technical indicators have stabilized near daily lows, the Momentum within negative levels and the RSI at around 23. The risk remains skewed to the downside, with a break below 108.00, opening the door for a steeper slide.
Support levels: 108.00 107.65 107.20
Resistance levels: 108.35 108.70 109.10
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