USD/JPY Forecast: Bulls poised to test the year’s high

Valeria Bednarik FXStreet

USD/JPY Current price: 110.40

The dollar advances ahead of US Federal Reserve chief Powell testimony.
Stocks trade with a positive tone, although investors are turning cautious ahead of the event.
USD/JPY is neutral-to-bullish, advances toward the year high at 110.96.

The American dollar is recovering its bullish strength after correcting extreme overbought conditions on Monday. The USD/JPY pair trades at around 110.40 as investors prepare for US Federal Reserve chief Jerome Powell. Powell is due to testify on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis. Market players are pricing in another round of hawkish comments from the Fed’s head.

Meanwhile, government bond yields hold on to the upper end of their recent ranges, while Asian and European indexes trade mostly up. Japan did not publish macroeconomic figures, while the US will release May Existing Home Sales and the June Richmond Fed Manufacturing Index.

USD/JPY short-term technical outlook

The USD/JPY pair is neutral-to-bullish in the near-term, and according to the 4-hour chart. The pair has extended its advance beyond all of its moving averages, which anyway remain directionless. Technical indicators reentered positive territory but lost their bullish strength, now consolidating above their midlines. The par could keep rallying on a break above 110.60 and test the 110.96 level, this year’s high.

Support levels: 109.80 109.35 109.00

Resistance levels: 110.60 110.95 111.30

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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