USD/JPY Forecast: Consolidating losses below 105.00

Valeria Bednarik FXStreet

USD/JPY Current price: 104.72

The Bank of Japan left its monetary policy on hold, as widely anticipated.
Worldwide equities closed in the red, US Treasury yields ended the day flat.
USD/JPY has extended its slump to a fresh one-month low, could keep on falling.

The USD/JPY pair is ending Thursday in the 104.70 price zone, after hitting a daily low of 104.52. The pair fell at the beginning of the day on the back of risk-aversion and remained depressed throughout the day as worldwide indexes spent it in the red. US Treasury yields failed to provide directional clues, as they traded within well-limited ranges, ending the day unchanged.

Early in the Asian session, the Bank of Japan announced its latest monetary policy decision, and, as widely expected, the central bank left its monetary policy unchanged, while upgrading its economic assessment. Policymakers said that the economy has started to pick up “gradually,” following the setback caused by the coronavirus pandemic. As usual, they reiterated that would add easing if necessary, although without hinting any action for the foreseeable future. This Friday, Japan will publish August National inflation figures.

USD/JPY short-term technical outlook

The USD/JPY pair retains its bearish stance, heading into the last trading day of the day. The 4-hour chart shows that it remains below a firmly bearish 20 SMA, which keeps accelerating south below the larger ones. The 100 SMA has crossed below the 200 SMA, indicating strong selling interest. Technical indicators, in the meantime, have stabilized well into negative territory, after correcting extreme oversold conditions. The pair has room to extend its decline towards 104.18, July low, should the pressure remain on the greenback.

Support levels: 104.70 104.20 103.85

Resistance levels: 105.10 105.50 106.00

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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