USD/JPY Forecast: Bears poised to challenge the 108.00 level

Valeria Bednarik FXStreet

USD/JPY Current price: 108.08

Tokyo and Osaka request the central government o declare a state of emergency.
Falling equities and government bond yields put USD/JPY under selling pressure.
USD/JPY trades near 108.00 with a bearish stance in the near-term.

The USD/JPY pair has enjoyed some temporal demand during London trading hours, peaking for the day at 108.54. However, a dismal market mood made the pair erase its gains, and settle just above the 108.00 level for a second consecutive day. Not only US stocks fell, but also US government bond yields, adding pressure on the pair. The yield on the 10-year Treasury note bottomed at 1.557% and settled nearby.

Meanwhile, Tokyo will likely request, while Osaka already did, to the central government to declare the state of emergency, amid the rising number of coronavirus contagions. Data wise, Japan published the February Tertiary Industry Index, which resulted at 0.3% MoM, better than the previous -1.7%. The country will not publish relevant macroeconomic figures this Wednesday.

USD/JPY short-term technical outlook

The near-term picture for the USD/JPY pair continues to indicate that another leg lower is likely. The 4-hour chart shows that a bearish 20 SMA keeps rejecting advances, currently at 108.40. The 100 SMA has turned south far above the current level, suggesting that bearish interest is on the rise. Technical indicators, in the meantime, have stabilized near oversold readings.

Support levels: 108.00 107.65 107.20

Resistance levels: 108.40 108.70 109.10

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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