USD/JPY Forecast: Anxious investors looking for direction

Valeria Bednarik FXStreet

USD/JPY Current price: 107.75

Civil unrest in the US weighs on the greenback despite a better market mood.
US ISM Manufacturing PMI expected to have bounced to 43 in May from 41.5 in April.
USD/JPY continues to trade within familiar levels, buyers hesitate ahead of 108.00.

The greenback started the day with a soft tone, weighed by unrest in the US over the death of a black citizen in the hands of a police officer. Riots started last week, but escalated over the weekend, with protesters reaching the White House on Sunday. The USD/JPY pair fell to 107.37 from where it later recovered towards the current 107.70 region. Some European countries celebrate a holiday today, although those that don’t, are seeing local indexes posting substantial gains, underpinning the pair.

Japanese data released overnight was generally positive, as Capital Spending in the first quarter of the year increased by 4.3% much better than the -4.2% expected. The May Jibun Bank Manufacturing PMI was confirmed at 38.2. The US session will bring the final May Markit Manufacturing PMI, seen unchanged from the preliminary estimate at 39.8, and the official ISM Manufacturing PMI, expected to have bounced to 43 in May from 41.5 in April.

USD/JPY short-term technical outlook

The USD/JPY pair is trading in its comfort zone despite anxious investors looking to re-position at the beginning of the month. The neural stance persists in the short-term, as the pair remains trapped between 107.30 and 108.10. In the 4-hour chart, the pair continues to seesaw around its moving averages, now developing above all of them after meeting buyers around a bullish 100 SMA. Technical indicators have recovered from their daily lows, heading higher around their midlines.

Support levels: 107.30 106.90 106.65

Resistance levels: 108.10 108.45 108.80

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.

EUR/USD holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD hovers near 1.3600 as UK government crisis weighs on Pound Sterling

GBP/USD moves sideways after registering modest gains in the previous session, trading around 1.3610 during the European hours on Monday. The pair could come under pressure as the Pound Sterling may weaken amid a fresh government crisis in the United Kingdom.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.