USD/JPY Forecast: At risk of resuming its slump
USD/JPY Current price: 103.75
- Japanese Industrial Production contracted 3.9% YoY in November.
- A holiday in the US will likely keep sentiment leading the way.
- USD/JPY is neutral-to-bearish in the short-term, could fall once below 103.50.
Risk aversion maintains the dollar bid across the board, although in the case of USD/JPY the balance continues. The pair trades around 103.80, unable to attract investors. Easing US Treasury yields and the poor performance of equities cap the advance. Upbeat Chinese GDP, on the other hand, partially offsets the dismal mood seen at the end of last week. The country reported a 6.5% growth rate in the last quarter of 2020.
Japanese data released at the beginning of the day indicated that Industrial Production contracted 3.9% YoY in November, missing the market’s expectations. Capacity Utilization contracted by 2.9% in the same month. The US celebrates a holiday, which means the country won’t publish macroeconomic data.
USD/JPY short-term technical outlook
The USD/JPY pair is trading just above the 38.2% retracement of this January’s advance, neutral-to-bearish in the near-term. In the 4-hour chart, the pair is trading within directionless moving averages, while technical indicators head marginally lower within negative levels. Bears will likely take over on a break below 103.50, the immediate support level.
Support levels: 103.50 103.15 102.70
Resistance levels: 104.10 104.50 104.90
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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.
