USD/JPY Forecast: Better market mood provides support

Valeria Bednarik FXStreet

USD/JPY Current price: 106.89

Japan’s Jibun Bank Services PM improved in February to 46.3 from 46.1.
USD/JPY is trading near this year high and poised to break higher.

The USD/JPY consolidates its latest gains, trading near this year high at 106.95. As US Treasury yields hold ground, demand for the greenback continues to recede. The American currency weakens against high-yielding rivals, although major pairs hold within familiar levels, as softer-than-anticipated EU data spurred some concerns. Stocks are up in Asian and European markets, reflecting the better market mood.

Japan published the February Jibun Bank Services PMI, which improved to 46.3 from 46.1. After the US opening, Markit will release the final reading of the US Services PMI, foreseen at 58.9, while the country will publish the official ISM index, expected at 58.7.

USD/JPY short-term technical outlook

The USD/JPY pair retains its bullish stance in the near-term and seems poised to extend gains above the 107.00 figure. In the 4-hour chart, a bullish 20 SMA provided intraday support during the Asian session, while it extends its advance beyond the longer ones. Technical indicators hold within positive levels, although with limited directional strength.

Support levels: 106.50 106.10 105.75

Resistance levels: 106.95 107.30 107.65

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.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Week ahead: US CPI, France’s budget crisis and Q3 earnings to set the market tone

The US dollar held relatively strong this week, despite the disappointing US jobs report on October 2, which further decreased the probability of a back-to-back rate hike by the Fed at the upcoming gathering on October 28.

CFTC Report: Euro and Aussie shorts expand amid diverging signals

The week in one sentence: Euro and Australian Dollar shorts deepened in the week to October 6, while Yen longs rebuilt. In addition, Coffee buying continued, and Gold exposure remained elevated despite another price decline. Speculators turned more negative on the Euro, increasing the net exposure to around 99.3K contracts.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?