USD/JPY Forecast: Consolidation continues

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.57

Japanese data in-line with expectations, economic contraction extended in May.
Equities gained some ground, but the market’s mood is extremely cautious.
USD/JPY needs to clearly break either below 106.90 or above 108.10.

The USD/JPY pair closed the day little changed around 107.60, having spent these last few sessions within Friday’s range. The pair fell to 107.37 during Asian trading hours as market players dumped the greenback, later dragged higher but the positive tone of equities. Also, US Treasury yields ticked higher, with the yield on the benchmark 10-year note reaching an intraday high of 0.69% providing support to the pair.

Japanese data released at the beginning of the day was generally positive, as Capital Spending in the first quarter of the year increased by 4.3% much better than the -4.2% expected. The May Jibun Bank Manufacturing PMI was confirmed at 38.2. Early Tuesday, the country will see the release of the May Monetary Base report, foreseen at 2.1% YoY.

USD/JPY short-term technical outlook

The USD/JPY pair continues to lack directional strength, having spent over two weeks around the current level. In its 4-hour chart, it continues to seesaw around moving averages, now struggling with a directionless 20 SMA, but having found support in a bullish 100 SMA, Technical indicators in the meantime, head nowhere around their midlines, failing to provide directional clues. Bears could have some chances on a break below 106.90, while bulls can become more courageous if the pair surpasses 108.10.

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 hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.