USD/JPY Forecast: Bulls becoming more courageous

Valeria Bednarik FXStreet

USD/JPY Current price: 104.22

Japan will publish Tokyo inflation, industrial production and consumer confidence figures.
Wall Street’s recovery provided little support to the pair, as it weighed on the dollar.
USD/JPY is poised to extend its advance towards the 105.00 price zone.

The USD/JPY pair hit a fresh January high of 104.45 but was unable to extend gains on easing demand for the greenback. The pair heads into the Asian opening trading around 104.20, holding on to modest intraday gains. The pair could not rally during US trading hours, despite substantial gains in Wall Street and recovering US Treasury yields. The yield on the 10-year Treasury note rose to 1.07%.

Japan released December Retail Trade, which was down 0.3% YoY, slightly better than expected. Large Retailer Sales for the same month came in at -3.5%, from -3.4% in the previous month. The Japanese calendar will be quite busy this Friday as the country will release January Tokyo inflation, the December unemployment rate, and Industrial Production for the same month. Later into the day, it will publish the January Consumer Confidence Index and housing-related data.

USD/JPY short-term technical outlook

The USD/JPY pair retains a positive stance, closing a second consecutive day above a daily descendant trend line coming from March 2020. In the 4-hour chart, the price holds above bullish moving averages, that are finally widening their range. The Momentum indicator heads higher near its daily highs, while the RSI holds near overbought readings. Renewed buying interest beyond the 104.40 price zone will likely favor a bullish extension towards the 105.00 area.

Support levels: 103.95 103.50 103.25

Resistance levels: 104.40 104.80 105.10

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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