USD/JPY Forecast: Renewed dollar’s demand hints at further gains
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UNLOCK OFFERUSD/JPY Current price: 109.66
- US Treasury yields edged lower, offsetting the dollar’s strength vs the Japanese currency.
- Japan will publish April Industrial Production and Capacity Utilization.
- USD/JPY is mildly bearish in the near-term, could break above 110.00.
The USD/JPY pair advanced on Friday to close the week with modest gains in the 109.60 price zone. The broad dollar’s demand underpinned the pair, although the poor performance of government bond yields limited the advance. The yield on the benchmark 10-year US Treasury note settled for the week at 1.45% after falling to 1.42%. Meanwhile, Wall Street managed to close in the green, but gains were modest.
Japan published the Q2 BSI Large Manufacturing Conditions Index, which printed at -1.4, worse than the previous 1.6. The country will publish April Industrial Production, expected to be confirmed at 15.4% YoY, and Capacity Utilization for the same month.
USD/JPY short-term technical outlook
The USD/JPY pair trades near the upper end of its weekly range at 109.83. The daily chart shows that a flat 20 SMA provided dynamic support around 109.25, while the longer moving averages keep heading north below it. Technical indicators turned modestly higher within positive levels but lack enough momentum to confirm another leg north. In the 4-hour chart, the risk skews to the upside, as the pair trades above all of its moving averages, which head marginally higher, while technical indicators advance within positive levels, although with moderate strength.
Support levels: 109.20 108.90 108.55
Resistance levels: 109.85 110.30 110.75
USD/JPY Current price: 109.66
- US Treasury yields edged lower, offsetting the dollar’s strength vs the Japanese currency.
- Japan will publish April Industrial Production and Capacity Utilization.
- USD/JPY is mildly bearish in the near-term, could break above 110.00.
The USD/JPY pair advanced on Friday to close the week with modest gains in the 109.60 price zone. The broad dollar’s demand underpinned the pair, although the poor performance of government bond yields limited the advance. The yield on the benchmark 10-year US Treasury note settled for the week at 1.45% after falling to 1.42%. Meanwhile, Wall Street managed to close in the green, but gains were modest.
Japan published the Q2 BSI Large Manufacturing Conditions Index, which printed at -1.4, worse than the previous 1.6. The country will publish April Industrial Production, expected to be confirmed at 15.4% YoY, and Capacity Utilization for the same month.
USD/JPY short-term technical outlook
The USD/JPY pair trades near the upper end of its weekly range at 109.83. The daily chart shows that a flat 20 SMA provided dynamic support around 109.25, while the longer moving averages keep heading north below it. Technical indicators turned modestly higher within positive levels but lack enough momentum to confirm another leg north. In the 4-hour chart, the risk skews to the upside, as the pair trades above all of its moving averages, which head marginally higher, while technical indicators advance within positive levels, although with moderate strength.
Support levels: 109.20 108.90 108.55
Resistance levels: 109.85 110.30 110.75
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