USD/JPY Forecast: Consolidating losses, lower lows still possible

Valeria Bednarik FXStreet

USD/JPY Current price: 103.96

Global stock indexes are under selling pressure as fears took over.
A scarce macroeconomic calendar exacerbates sentiment-related trading.
USD/JPY is comfortable sub-104.00, bullish potential well-limited.

The USD/JPY pair trades around 103.90, consolidating weekly losses. The dollar is getting some attention early in the European session as concerns mount and fears rule. Global stocks are down as investors can’t cheer vaccine news. The second wave of the pandemic continues to worsen in the northern hemisphere, and more restrictions are being planned or announced in the US and Europe. Speculative interest is pricing in a steeper economic downturn in Q4.

The Japanese macroeconomic calendar has nothing relevant to offer overnight, although Australian employment data was upbeat. Nevertheless, it fell short of spurring some risk appetite. The US will unveil today Initial Jobless Claims for the week ended November 13, foreseen at 707K, and the November Philadelphia Fed Manufacturing Survey, expected at 22 from 32.3 in the previous month.

USD/JPY short-term technical outlook

The USD/JPY pair has decelerated its decline, but the risk is still skewed to the downside in the near-term. The 4-hour chart shows that it is developing well below all of its moving averages, with the 20 SMA still heading south below the larger ones. Technical indicators are modestly recovering but holding near weekly lows and lacking directional momentum. The risk of a bearish extension could decrease on a recovery above 104.00, but the pair will remain far from bullish.

Support levels: 103.50 103.15 102.80

Resistance levels: 104.00 104.30 104.75

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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