USD/JPY Forecast: Back to its comfort zone above 107.00

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.21

Japan Jibun Bank Manufacturing PMI improved to 42.6 in July, according to preliminary estimates.
US Treasury yields under pressure amid stubbornly high new daily coronavirus cases worldwide.
USD/JPY recovered the 107.00 threshold, but its bullish potential is well-limited.

The USD/JPY pair recovered once again from the 106.60 price zone and returned to its comfort zone a few pips above the 107.00 level. The sentiment remained sour throughout the day, fueled by US-China tensions and pandemic-related headlines. Nevertheless, a modest advance in US indexes has helped the pair to recover above 107.00 during US trading hours. US Treasury yields, in the meantime, edged lower with the yield on the benchmark 10-year note down to 0.58%, as concerns about the stubbornly high number of new daily coronavirus cases undermined the market’s mood. Over the last 24 hours, the world reported roughly 240,000 new contagions, with 67,000 of those coming from the US.

Japan published at the beginning of the day the preliminary estimate of the July Jibun Bank Manufacturing PMI, which came in better than anticipated, printing at 42.6 also improving from the previous 40.1. Japan will be on holiday this Thursday, as it celebrates Marine Day.

USD/JPY short-term technical outlook

The USD/JPY pair bounced from the base of its latest range, losing the bearish strength seen on previous updates. The pair is now neutral, according to the 4-hour chart, as technical indicators turned flat after reaching their midlines. In the mentioned time-frame, it has settled above its 20 SMA but remains below the largest one. The bullish potential seems well-limited by the broad dollar’s weakness.

Support levels: 106.95 106.60 106.20

Resistance levels: 107.45 107.80 108.15

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 off highs, back to around 1.1900

EUR/USD keeps its strong bid bias in place despite recedeing to the 1.1900 zone following earlier peaks north of 1.1900 the figure on Monday. The US Dollar remains under pressure, as traders stay on the sidelines ahead of Wednesday’s key January jobs report, leaving the pair room to extend its upward trend for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

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.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.