USD/JPY Forecast: Consolidation phase continues

Valeria Bednarik FXStreet

USD/JPY Current price: 105.34

The market sentiment is upbeat amid hopes related to Brexit and a US funding package.
Japanese Leading Economic Index hit 86.9 in July, better than previously estimated.
USD/JPY is technically neutral, bears could take over on a break below 105.00.

The dollar is under pressure as the market’s mood turned upbeat. Equities trade firmly in the green ever since the day started, amid hopes for a US coronavirus aid package. European indexes got an additional boost from headlines suggesting the EU and the UK are advancing towards a trade deal. The USD/JPY pair eased within range and trades around 105.35, as demand for safe-haven assets is limited.

Japan published at the beginning of the day its July Leading Economic Index, which came as expected at 86.9. The Coincident Index for the same month printed 76.2, also matching the market’s forecast. The US will release later today the Dallas Fed Manufacturing Business Index for September, previously at 8.

USD/JPY short-term technical outlook

The USD/JPY pair is trading in its latest comfort zone, neutral according to intraday technical readings. The 4-hour chart shows that the pair is developing just below a still bullish 20 SMA, while the larger ones maintain their mildly bearish slopes above the shorter one. Technical indicators, in the meantime, are directionless around their midlines.

Support levels: 105.00 104.60 104.20

Resistance levels: 105.55 105.90 106.25

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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