USD/JPY Forecast: Advancing towards February’s high

Valeria Bednarik FXStreet

USD/JPY Current Price: 110.86

Japan celebrates a holiday this Friday, may help the improved market’s mood.
Dollar’s demand continues amid coronavirus uncertainty.
USD/JPY bullish despite overbought in the short-term, 112.20 at sight.

The USD/JPY pair is trading at levels not seen since February this year, having peaked at 110.94 and trading nearby as the day comes to an end. The pair broke higher early Asia, as a result of the ECB’s liquidity injection alongside BOJ’s purchasing a record high of 201.6 billion yen of Japanese stock exchange-traded funds boosting the market’s mood. Asian equities edged lower, but European and American indexes posted interesting gains, further underpinning the pair. Treasury yields, however, lost some ground, with the yield on the benchmark 10-year note down to 1.12%.

Japanese National inflation released at the beginning of the day came in at 0.4% YoY for February, well below the previous 0.7% and the expected 0.8%. Japan will celebrate a holiday this Friday, which means no data and probably less volatility during the Asian session.

USD/JPY short-term technical outlook

The USD/JPY pair is trading in the 110.60 area, overbought in the short-term but still poised to advance. The 4-hour chart shows that it has advanced above all of its moving averages, with the 20 SMA advancing between the larger ones. Technical indicators head north within overbought territory, supporting further gains ahead toward February high at 112.22.

Support levels: 110.40 110.05 109.65

Resistance levels: 111.30 111.75 112.20

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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