USD/JPY Forecast: Consolidation continues, no definitions at sight

Valeria Bednarik FXStreet

USD/JPY Current Price: 108.63

US-China trade-related headlines barely enough to keep hopes alive.
Japanese National remained far below BOJ’s target in September.
USD/JPY technically neutral, downside potential limited by buyers around 108.00.

The USD/JPY pair has settled at 108.63, barely changed weekly basis. The pair bottomed at 108.27 on Thursday, recovering just modestly on reassuring comments from US President Trump and the Chinese leader, Xi-Jinping, both suggesting a trade deal is around the corner. Xi Jinping repeated that Beijing wants to work out a deal with Washington, but added that he is not afraid to retaliate if necessary. Trump, on the other hand, said that a trade deal with China was "potentially very close." Better than expected US data, helped the pair stay afloat.

Japan released on Friday its October National inflation, with the core ex-fresh food reading at 0.4%, as expected. The country also released the preliminary November estimate of the Jibun Bank Manufacturing PMI which missed the market’s expectations by printing at 48.6. This Monday, the country will release the final version of the September Leading Index, foreseen unchanged at 92.2, and the Coincident Index for the same month, expected at 101.

USD/JPY short-term technical outlook

The USD/JPY pair is technically neutral according to the daily chart, trading below the 20 and 200 DMA, both lacking directional strength, while the 100 DMA also heads nowhere, but well below the current level. Technical indicators are around their midlines, the Momentum heading lower but the RSI stable at around its 50 level. In the shorter term, and according to the 4-hour chart, the pair is also neutral, trading below the 100 SMA but above the 20 SMA, as technical indicators hover around their midlines without directional strength.

Support levels: 108.50 108.20 107.75

Resistance levels: 108.90 109.25 109.50

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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