USD/JPY Forecast: Poised to challenge the 109.00 threshold
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UNLOCK OFFERUSD/JPY Current price: 109.42
- US Treasury yields ticked higher after auctions but remained well off their recent highs.
- Japan´s encouraging data provide marginal support to the Japanese yen.
- USD/JPY at risk of falling further, mainly on a break below 109.00.
The USD/JPY pair eased on Monday, bottoming at 109.24 and finishing the day at around 109.40. The Japanese currency appreciated on the back of the poor performance of global equities and stable US government bond yields. The US auction 10-year Treasury notes at 1.68%, slightly above the market’s price. Still, the yield held below 1.70%, the level that determines whether or not the greenback can rally.
Japanese data released at the beginning of the day was generally encouraging. The March Producer Price Index was up 0.8% MoM and 1% YoY, beating expectations. Machine Tool Orders in the same month increased 65%, largely surpassing the previous 36.7% advance. The country will release March Money Supply in the upcoming Asian session.
USD/JPY short-term technical outlook
The USD/JPY pair looks poised to extend its slide, although it would need to break the 109.00 support to confirm a new leg lower. In the 4-hour chart, the pair is currently developing below its 20 and 100 SMA, with the shorter heading south below the longer one. The Momentum indicator heads higher above its midline, but with the price near daily lows, and the RSI flat at around 41, chances of a steeper advance are limited at the time being.
Support levels: 109.50 109.00 108.65
Resistance levels: 109.95 110.30 110.75
USD/JPY Current price: 109.42
- US Treasury yields ticked higher after auctions but remained well off their recent highs.
- Japan´s encouraging data provide marginal support to the Japanese yen.
- USD/JPY at risk of falling further, mainly on a break below 109.00.
The USD/JPY pair eased on Monday, bottoming at 109.24 and finishing the day at around 109.40. The Japanese currency appreciated on the back of the poor performance of global equities and stable US government bond yields. The US auction 10-year Treasury notes at 1.68%, slightly above the market’s price. Still, the yield held below 1.70%, the level that determines whether or not the greenback can rally.
Japanese data released at the beginning of the day was generally encouraging. The March Producer Price Index was up 0.8% MoM and 1% YoY, beating expectations. Machine Tool Orders in the same month increased 65%, largely surpassing the previous 36.7% advance. The country will release March Money Supply in the upcoming Asian session.
USD/JPY short-term technical outlook
The USD/JPY pair looks poised to extend its slide, although it would need to break the 109.00 support to confirm a new leg lower. In the 4-hour chart, the pair is currently developing below its 20 and 100 SMA, with the shorter heading south below the longer one. The Momentum indicator heads higher above its midline, but with the price near daily lows, and the RSI flat at around 41, chances of a steeper advance are limited at the time being.
Support levels: 109.50 109.00 108.65
Resistance levels: 109.95 110.30 110.75
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