USD/JPY Forecast: Bears are in control despite the lack of direction

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.02

Japan Merchandise Trade Balance is foreseen at ¥-35.8 B in June from ¥-833.4 B previously.
US Treasury yields came under pressure as coronavirus contagions continue to increase.
USD/JPY holding within familiar levels but with the risk skewed to the downside.

The USD/JPY pair ended the week as it started it, hovering around the 107.00 figure. The pair was confined to an 80 pips’ range but posted a lower low and a lower high for the week, which somehow skews the risk to the downside. Concerns about the ongoing coronavirus crisis are keeping the pair near its recent lows, while rising global equities limit the bearish scope.

Japan didn’t publish macroeconomic data at the end of the week, but US Treasury yields fell with the yield on the benchmark 10-year Treasury note briefly piercing 0.60% to finally settle at 0.62%. At the beginning of the week, the country will publish the minutes of the latest BOJ meeting, and publish the June Merchandise Trade Balance, foreseen at ¥-35.8 B from ¥-833.4 B in the previous month.

USD/JPY short-term technical outlook

Daily technical readings for USD/JPY support a bearish continuation in the upcoming days, as the pair has been unable to recover above its 20 SMA, which stands below the larger ones. Technical indicators, in the meantime, have turned marginally lower within neutral levels. In the 4-hour chart, the risk is also skewed to the downside, as the pair is developing below all of its moving averages, while the RSI indicator consolidates around 45. The Momentum indicator diverges, standing within positive levels, although lacking strength enough to support an upcoming advance.

Support levels: 106.95 106.60 106.20

Resistance levels: 107.50 107.90 108.30

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.

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