USD/JPY Forecast: Still searching for direction
|- USD/JPY edges lower, but the downward move lacks follow-through.
- Short-term technical picture begins to turn bearish.
- Break below 20-day SMA could pave the way to lower levels.
The USD/JPY made a fresh ten-day low on Thursday, but the move lacked follow-through, which left it at square one at the 107.25 area by the end of the New York session. The USD/JPY pair continues to post lower lows on a daily basis, which could be read as a bearish sign, but remains unable to close below the 20-day SMA, which has been containing downside attempts since the beginning of July. The US dollar struggled to gain any meaningful traction as markets largely ignored the US jobless claims data, which in turn left USD/JPY confined to its recent range.
The short-term technical picture for USD/JPY has turned slightly bearish, with indicators entering negative territory in the 4-hour chart. In the daily chart, the bias remains neutral as per indicators, while the price remains inside a range bounded by the 20- and the 100-day SMAs at 107.20 and 107.70, respectively. A decisive break outside this channel is needed to set a short-term direction.
Support levels: 107.10 106.80 106.60
Resistance levels: 107.70 107.95 108.35
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