USD/JPY Forecast: At risk of losing the 104.00 level

Valeria Bednarik FXStreet

USD/JPY Current price: 104.48

BOJ Minutes maintained the focus on covid and economic growth.
US Treasury yields edged lower, opposed to equities and signaling caution.
USD/JPY is technically bearish but still holding above the critical 104.00 threshold.

The USD/JPY pair is ending Wednesday as it started it, trading around 104.50. Sentiment swings saw the pair advance to 105.34 to later fell to 104.14, now stable at lower levels as despite rallying equities, government debt yield was down, somehow suggesting a cautious stance from investors. The yield on the benchmark 10-year Treasury yield fell to 0.76%, a fresh weekly low.

The Bank of Japan published the Minutes of its latest meeting, which showed that policymakers are concerned about how to address the economic setback resulting from the coronavirus pandemic, as the economy is still struggling to recover. This Thursday, the country will publish September Overall Household Spending and Labour Cash Earnings for the same month.

USD/JPY short-term technical outlook

The USD/JPY pair is bearish and poised to extend its decline. The 4-hour chart shows that it was unable to retain gains above a bearish 100 SMA, now also below the 20 SMA. Technical indicators are stable within negative levels, lacking clear directional strength but still skewing the risk to the downside. The pair needs to break below the critical 104.00 area to confirm further declines ahead.

Support levels: 104.30 103.95 103.50

Resistance levels: 105.05 105.40 105.85

View Live Chart for the USD/JPY

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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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