USD/JPY Forecast: Consolidating below 110.00 upside limited

Valeria Bednarik FXStreet

USD/JPY Current price: 109.73

Japanese data mixed, outlook remains sour according to the Eco Watchers Survey.
Coronavirus concerns keep equities in the red in Asia and Europe.
USD/JPY neutral in the short-term, sellers aligned around 110.00.

The market is in consolidation mode at the beginning of the week, with the USD/JPY pair hovering in the 109.70/80 region. Fears about the coronavirus outbreak continue to dominate the financial world, with Asian and European indexes in the red, further pressured by the negative lead of Wall Street.

Japanese data released at the beginning of the day was mixed, as the January Eco Watchers Survey on the current situation came in at 41.9, beating the market’s expectations, although the survey on the outlook deteriorated to 41.8. The December Trade Balance printed a surplus of ¥120.7B, recovering from a ¥-2.5B in the previous month, although the Current Account surplus contracted to ¥524B. The US won´t release macroeconomic data, but a couple of Fed’s speakers will hit the wires.

USD/JPY short-term technical outlook

The USD/JPY pair is neutral in the short-term, as, in the 4-hour chart, it is above its larger moving averages, but unable to surpass an also flat 20 SMA. Technical indicators in the mentioned time-frame lack directional strength, the Momentum in neutral levels but the RSI at around 59, suggesting a limited selling interest at the time being. A recovery seems unlikely, with sellers aligned around the 110.00 figure.

Support levels: 109.40 109.00 108.65

Resistance levels: 110.00 110.35 110.70

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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