USD/JPY Forecast: Bulls ready to challenge February’s high

USD/JPY Current price: 106.10

US Treasury yields hit fresh one-year highs as global indexes advance.
Japan’s December Leading Economic Index came in at 95.3, better than the 94.9 expected.
USD/JPY is comfortably trading above 106.00 and poised to move higher.

Risk is on and the dollar fells against its high-yielding rivals but also runs against the JPY. The USD/JPY pair trades in the 106.10 price zone as global indexes advance in the aftermath of the Fed’s Powell testimony. The head of the US Central Bank has made it clear that there’s a long way ahead of an economic comeback, adding that the ultra-loose monetary policy will remain in place for as long as required.

US Treasury yields also advance, reaching fresh one-year highs, although helping the greenback only against safe-haven rivals. Data wise, Japan published the final version of the December Leading Economic Index, which came in at 95.3, better than the 94.9 previously estimated. The Coincident Index for the same month printed at 88.3, better than the 87.8 expected.

The US will release today January Durable Goods Orders, foreseen at 1.1% from 0.5% in the previous month. The calendar will include Initial Jobless Claims for the week ended February 19, foreseen at 838K, and January Pending Home Sales.

USD/JPY short-term technical outlook

The USD/JPY pair is trading near a 2021 high of 106.22. The near-term picture is bullish, as, in the 4-hour chart, the pair is trading above bullish moving averages. Technical indicators lack directional strength but stand near overbought levels. The pair has been meeting buyers on retracements towards the 105.80 level, the immediate support. As long as the pair holds above it, the risk will remain skewed to the upside.

Support levels: 105.80 105.35 104.90

Resistance levels: 106.25 106.60 106.95

View Live Chart for the USD/JPY

Share: Analysis feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.