USD/JPY Forecast: Continued advance likely in the near-term

Valeria Bednarik FXStreet

USD/JPY Current price: 106.02

US Treasury yields reached fresh multi-week highs, underpinning the pair.
Japanese Leading Economic Index improved by less than anticipated in August.
USD/JPY is bullish and nearing a strong static resistance level at 106.25.

The USD/JPY pair surged to a fresh three-week high of 106.10, finding support in an improved market´s sentiment and higher government debt yields. Both were underpinned by comments from US President Trump, who announced his support for the economy after earlier calling off negotiations over a stimulus aid package with Democrats. Meanwhile, the yield on the benchmark 10-year note surged to 0.79% a fresh multi-week high.

Japan published at the beginning of the day the preliminary estimate for the August Leading Economic Index, which improved by less than anticipated, printing at 88.8 vs the 89.4 forecast. The Coincident index for the same period beat expectations, coming in at 79.4. During the upcoming Asian session, the country will publish the August Trade Balance and the September Eco Watchers Survey.

USD/JPY short-term technical outlook

The USD/JPY pair is trading around 106.00 as the day comes to an end, bullish in the short-term. The 4-hour chart shows that the pair is comfortable above all of its moving averages, with the 20 SMA advancing within the larger ones. Technical indicators in the mentioned time-frame head modestly higher within positive levels, keeping the risk skewed to the upside.

Support levels: 105.80 105.40 105.00

Resistance levels: 106.25 106.60 107.00

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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