USD/JPY Forecast: Approaching critical long-term resistance

Valeria Bednarik FXStreet

USD/JPY Current price: 104.11

US Treasury yields extended their advance on stimulus hopes.
Japan will release its November Trade Balance and the December Eco Watchers Survey.
USD/JPY is technically bullish in the near-term, needs to run past 104.50.

The USD/JPY pair hit 104.39, its highest in over three weeks, to close the day in the 104.10 price zone. The pair advanced for a fourth consecutive day, underpinned by rising US Treasury yields, as the yield of the benchmark 10-year note surged to 1.14%, its highest since March last year. Hopes that upcoming US President Joe Biden will work in a new stimulus program “in the trillions of dollars,” according to his own words, maintain safe-haven assets under pressure.

Japan didn’t publish macroeconomic data on Monday, as local markets were close due to a local holiday. The country will release its November Trade Balance and the December Eco Watchers Survey during the upcoming Asian session.

USD/JPY short-term technical outlook

The USD/JPY pair could extend its advance during the upcoming sessions, according to intraday technical readings. The 4-hour chart shows that it is well above all of its moving averages, with a sharply bullish 20 SMA about to cross above the 200 SMA. Technical indicators eased from overbought territory, but the RSI is stable at around 64, indicating limited selling interest. The pair keeps approaching a long-term descendant trend line in the 104.50 price zone, with gains above it opening doors for a steeper advance.

Support levels: 103.85 103.50 103.15

Resistance levels: 104.50 104.90 105.30

View Live Chart for the USD/JPY

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.