USD/JPY Forecast: Bulls still cautious, 108.10 critical resistance

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.83

Japan’s consumer confidence improved in May, despite awful sales and industrial production figures.
The Japanese Jibun Bank Manufacturing PMI seen unchanged at 38.4 in May.
USD/JPY continues trading in a well-limited range, lacking directional strength.

The USD/JPY pair finished the week with modest gains around 107.80, having spent these last few days confined to a tight range below the 108.00 mark. The pair fell on Friday to 107.07, holding on to the lower ground after dismal US data. It later recovered on the back of comments from the US Federal Reserve’s head Powell, who said that the Fed is strongly committed to using all of its tolls, although clarifying emergency tools are for lending but not for spending. The recovery was also backed by US President Trump, as he was softer-than-anticipated in its announcement on measures on China. He did not mention new tariffs or the end of phase one of the trade deal but decided to reduce Hong Kong’s privileges.

Japanese data released by the end of the week was mixed, as Tokyo inflation ex-fresh food printed at 0.2% YoY in May, better than anticipated. April Retail Trade, however, plunged by 13.7% when compared to a year earlier while Industrial production fell by 14.4% in the same period, worse than anticipated. Housing Starts were also down by 12.9%, while the May Consumer Confidence Index surged in May to 24. This Monday, the country will see the release of the Jibun Bank Manufacturing PMI seen unchanged at 38.4 in May.

USD/JPY short-term technical outlook

The daily chart for the USD/JPY pair continues to indicate an absence of directional strength, neutral for over two weeks now. It has met buyers from a flat 20 DMA while it remained below its 100 and 200 DMA, both converging at around 108.30. Technical indicators, in the meantime, remain within neutral levels. In the 4-hour chart, the pair settled above all of its moving averages, although the RSI indicator turned flat around 55 and the Momentum resume its slide after briefly entering positive territory, now below its mid-line. The bullish potential could increase on a break above 108.10, its immediate resistance.

Support levels: 107.30 106.90 106.65

Resistance levels: 108.10 108.45 108.80

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.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.