USD/JPY Forecast: Yields provide support
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UNLOCK OFFERUSD/JPY Current price: 106.35
- Japan will open its calendar this Wednesday, with the Corporate Service Price Index.
- Wall Street is mixed, with the S&P reaching fresh record highs but the DJIA in the red.
- USD/JPY is ending the day with gains above the 106.00 level.
The USD/JPY pair ends Tuesday with substantial gains in the 106.35 price zone, after peaking at 106.57. The pair holds on to intraday gains despite the poor performance of Wall Street, as while the S&P reached yet another record high, the DJIA closed in the red. US indexes were affected by a report indicating US consumer confidence plunged in August. Meanwhile, the pair found support in government debt yields, as Treasury yields were firmly higher, with that on the 10-year note reaching a one-week high of 0.72%.
Japan will open its macroeconomic calendar this Wednesday with the release of the July Corporate Service Price Index, previously at 0.8%. Also, the country will publish the final version of the June Leading Economic Index, expected unchanged at 85, and the Coincident Index for the same month.
USD/JPY short-term technical outlook
The USD/JPY pair settled above the 61.8% retracement of its latest daily decline, measured between 107.04 and 105.09, at 106.29, now the immediate support level. In the 4-hour chart, the pair is now holding above all of its moving averages, which anyway lack clear directional strength. Technical indicators have lost their bullish potential, the Momentum turning lower and the RSI consolidating around 68. The rally will likely continue on an extension beyond 106.70.
Support levels: 106.30 105.90 105.50
Resistance levels: 106.70 107.05 107.40
USD/JPY Current price: 106.35
- Japan will open its calendar this Wednesday, with the Corporate Service Price Index.
- Wall Street is mixed, with the S&P reaching fresh record highs but the DJIA in the red.
- USD/JPY is ending the day with gains above the 106.00 level.
The USD/JPY pair ends Tuesday with substantial gains in the 106.35 price zone, after peaking at 106.57. The pair holds on to intraday gains despite the poor performance of Wall Street, as while the S&P reached yet another record high, the DJIA closed in the red. US indexes were affected by a report indicating US consumer confidence plunged in August. Meanwhile, the pair found support in government debt yields, as Treasury yields were firmly higher, with that on the 10-year note reaching a one-week high of 0.72%.
Japan will open its macroeconomic calendar this Wednesday with the release of the July Corporate Service Price Index, previously at 0.8%. Also, the country will publish the final version of the June Leading Economic Index, expected unchanged at 85, and the Coincident Index for the same month.
USD/JPY short-term technical outlook
The USD/JPY pair settled above the 61.8% retracement of its latest daily decline, measured between 107.04 and 105.09, at 106.29, now the immediate support level. In the 4-hour chart, the pair is now holding above all of its moving averages, which anyway lack clear directional strength. Technical indicators have lost their bullish potential, the Momentum turning lower and the RSI consolidating around 68. The rally will likely continue on an extension beyond 106.70.
Support levels: 106.30 105.90 105.50
Resistance levels: 106.70 107.05 107.40
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