USD/JPY Forecast: Bearish trend remains in place

Valeria Bednarik FXStreet

USD/JPY Current Price: 106.66

A better market mood failed to lift the pair this week.
BOJ’s Summary of Opinions report to provide fresh inflation and growth forecasts.
USD/JPY bounced from 105.98 but the risk remains skewed to the downside.

The USD/JPY pair settled in the 106.60 region last Friday, down for a second consecutive week. The pair traded as low as 105.98, its lowest in almost two months mid-week, slowly grinding higher afterwards, helped by an improving market’s mood. By the end of the week, Japan released Labor Cash Earnings for March, which increased by 0.1% when compared to a year earlier, missing the market’s expectations. Overall Household Spending in the same period decreased by 6.0%. Also, the Jibun Bank Services PMI plunged to 21.5 in April after printing 33.8 in March. Early Monday, the Bank of Japan will publish the Summary of Opinions report, which includes inflation’s and growth’s projections.

USD/JPY short-term technical outlook

The daily chart for the USD/JPY pair shows that the upside has been limited by a daily descendant trend-line coming from April’s high at 109.37, now providing resistance at around 106.90. In the mentioned time-frame, the 20 DMA heads firmly south just above the mentioned trend-line, while technical indicators remain within negative levels, directionless. In the 4-hour chart, the pair has managed to settle above a mild-bearish 20 SMA but holds below the larger ones, as technical indicators consolidate just above their mid-lines.

Support levels: 106.30 106.00 105.65

Resistance levels: 106.90 107.30 107.70

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.

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