USD/JPY Forecast: At risk of extending the decline

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.32

Japan May Leading Economic Index seen contracting to 73.2 from 77.7.
US Treasury yields were unable to retain intraday gains, finished the day unchanged.
USD/JPY down on broad dollar’s weakness, immediate support at 106.95.

The USD/JPY pair surged to a daily high of 107.76 during the Asian session amid risk-appetite taking over the financial world. Asian indexes posted substantial gains, led by Chinese optimism on an economic comeback, which later extended into European and American markets. Broad dollar’s weakness, however, pushed the pair lower in the last trading session of the day, with the pair piercing the bottom of its latest range and ending the day in the 107.30 price zone.

US Treasury yields advanced intraday on the back of upbeat local data, but trimmed gains ahead of the close, adding pressure on the pair. During the upcoming Asian session, Japan will publish the preliminary estimate of the May Leading Economic Index, foreseen at 73.2 from 77.7 in the previous month. The country will also publish the Coincident Index for the same month, seen at 80.7 from 80.1 previously.

USD/JPY short-term technical outlook

The USD/JPY pair is at risk of falling further, as the pair has finally moved away from the 38.2% retracement of its latest daily decline. In the 4-hour chart, it’s barely holding above a flat 100 SMA, and below the 20 and 200 SMA, while technical indicators head firmly lower within negative levels. The bearish case will be firmer if the pair losses 106.95, the next Fibonacci support level.

Support levels: 107.20 106.95 106.60

Resistance levels: 107.50 107.95 108.30

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 stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.