USD/JPY Forecast: Bulls insists despite uncertainty
USD/JPY Current Price: 109.45
- Tokyo inflation beat the market’s expectations, remained well below BOJ’s target.
- The Japanese manufacturing PMI seen in contraction territory during November.
- USD/JPY technically bullish, heading toward 110.00 a psychological resistance.
The USD/JPY pair has closed Friday at 109.45, its highest weekly settlement in six months. It hit 109.66 before retreating as the greenback suffered a knee-jerk amid month-end fixing, but overall retains the bullish strength. Japanese data released on Friday was mixed, as Tokyo November inflation beat the market’s expectations, up by 0.8% YoY. The core reading ex-fresh food met the market’s expectations, printing at 0.6%. The preliminary estimate of October Industrial Production, however, plummeted by 4.2% in the month and by 7.4% when compared to a year earlier. Finally, November Consumer Confidence bounced, up to 38.7.
In a thinned US session, the pair traded uneventfully, weighed by the sour tone of equities yet underpinned by rising US Treasury yields, as the yield on the benchmark 10-year Treasury note rose to 1.79% to close the week at 1.77%. This Monday, Japan will release the November Jibun Bank Manufacturing PMI, seen steady at 48.6.
USD/JPY short-term technical outlook
The USD/JPY pair is offering a neutral-to-bullish stance in its daily chart, as it continues developing above all of its moving averages, and with the 20 DMA about to cross above the 200 DMA. Technical indicators, in the meantime, consolidate within positive levels. In the shorter term, and according to the 4-hour chart, the pair met intraday buyers around a strongly bullish 20 SMA, while technical indicators corrected overbought conditions to settle within positive levels, keeping the risk skewed to the upside.
Support levels: 109.30 109.05 108.80
Resistance levels: 109.60 109.90 110.10
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.
