USD/JPY Forecast: Bulls pressuring psychological resistance level

Valeria Bednarik FXStreet

USD/JPY Current Price: 109.93

Japan will release the November Trade Balance and the December Eco Watchers survey.
Risk-on sentiment plays against safe-haven yen and backs a mildly weak dollar.
USD/JPY could near the 111.00 figure in the upcoming sessions.

The USD/JPY pair traded as high as 109.94, a level that was last seen in May 2019, as speculative interest kept dumping safe-haven assets. As Middle-East tensions continue to ease, although remain latent in the background, the market’s attention shifted to the US-China trade relationship. Both economies are expected to sign phase one of the trade deal next Wednesday, and ahead of the event, the US was reportedly said to be removing the currency manipulator tag on China.

Japan started the week with a holiday and didn’t release relevant data at the beginning of the day. This Tuesday, however, the country will release November trade data, with an expected trade deficit of 412.6B yen. The country will also release the December Eco Watchers Survey, with the Outlook seen deteriorating from 45.7 to 44.7, and the Current seen at 36.9 from 39.4.

USD/JPY short-term technical outlook

The USD/JPY pair holds on to intraday gains ahead of the Asian opening, trading a couple of pips below the mentioned high. The short-term picture is positive, although the pair needs a, so far, absent momentum to be able to extend its gains beyond the critical 110.00 level. In the 4-hour chart, technical indicators stand pat, the Momentum above its mid-line and the RSI at around 75. A bullish acceleration is expected once beyond the mentioned psychological level toward the 110.60/80 price zone.

Support levels: 109.70 109.35 108.90

Resistance levels: 110.00 110.40 110.75

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.

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