USD/JPY Forecast: Sellers aligned around 105.00
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UNLOCK OFFERUSD/JPY Current price: 104.86
- Risk-off leads the way at the beginning of the week amid political and growth concerns.
- US Treasury yields and equities are in retreat mode ahead of Wall Street’s opening.
- USD/JPY recovered some ground, but its bullish potential is limited.
The dollar advanced alongside fears at the beginning of the day, amid rising coronavirus contagions worldwide. The WHO reported three consecutive days of record cases, with multiple European countries reporting levels of contagions above those seen between March and April. However, the American currency remains on the back foot, pressured by political uncertainties in the US. The USD/JPY pair is marginally higher, trading in the 104.80 region after flirting with the 105.00 figure.
Asian indexes are mixed, while European ones trade in the red, these last undermined by soft German data. US Treasury yields are down weighed by covid-related concerns and the absence of progress in a US stimulus package, all of which limits the bullish potential of USD/JPY.
In the data front, Japan published the September Corporate Service Price Index, which improved from 1.1% to 1.3% YoY. The August Economic Index came in at 88.4, missing expectations of 88.8 The Coincident Index for the same month printed at 79.2, also below the market’s forecast. The US will publish the September Chicago Fed National Activity Index, New Home Sales for the same month and the October Dallas Fed Manufacturing Business Index.
USD/JPY short-term technical outlook
The USD/JPY pair has a limited bullish potential, according to intraday technical readings. The 4-hour chart shows that the pair is developing above a bearish 20 SMA, while technical indicators are turning south within neutral levels. Selling interest is aligned around the 105.00 level, and it seems unlikely that the pair could advance beyond that level, as the greenback lacks self strength, appreciating only on demand for safety, which also means yen demand.
Support levels: 104.65 104.30 103.95
Resistance levels: 105.00 105.40 105.80
USD/JPY Current price: 104.86
- Risk-off leads the way at the beginning of the week amid political and growth concerns.
- US Treasury yields and equities are in retreat mode ahead of Wall Street’s opening.
- USD/JPY recovered some ground, but its bullish potential is limited.
The dollar advanced alongside fears at the beginning of the day, amid rising coronavirus contagions worldwide. The WHO reported three consecutive days of record cases, with multiple European countries reporting levels of contagions above those seen between March and April. However, the American currency remains on the back foot, pressured by political uncertainties in the US. The USD/JPY pair is marginally higher, trading in the 104.80 region after flirting with the 105.00 figure.
Asian indexes are mixed, while European ones trade in the red, these last undermined by soft German data. US Treasury yields are down weighed by covid-related concerns and the absence of progress in a US stimulus package, all of which limits the bullish potential of USD/JPY.
In the data front, Japan published the September Corporate Service Price Index, which improved from 1.1% to 1.3% YoY. The August Economic Index came in at 88.4, missing expectations of 88.8 The Coincident Index for the same month printed at 79.2, also below the market’s forecast. The US will publish the September Chicago Fed National Activity Index, New Home Sales for the same month and the October Dallas Fed Manufacturing Business Index.
USD/JPY short-term technical outlook
The USD/JPY pair has a limited bullish potential, according to intraday technical readings. The 4-hour chart shows that the pair is developing above a bearish 20 SMA, while technical indicators are turning south within neutral levels. Selling interest is aligned around the 105.00 level, and it seems unlikely that the pair could advance beyond that level, as the greenback lacks self strength, appreciating only on demand for safety, which also means yen demand.
Support levels: 104.65 104.30 103.95
Resistance levels: 105.00 105.40 105.80
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