USD/JPY Forecast: Critical near-term support at 104.40

Valeria Bednarik FXStreet

USD/JPY Current price: 104.62

Retreating US Treasury yields weigh on the American currency.
The macroeconomic calendar will remain scarce, having no impact on currencies.
USD/JPY is in a corrective decline, the bearish trend could gain momentum.

The greenback extends its decline this Tuesday, with USD/JPY trading near a daily low of 104.53. US Treasury yields lead the pair, retreating further from Monday’s peaks. Adding pressure, European indexes trade in the red, dragging US futures lower.

Data wise, the macroeconomic calendar has nothing relevant to offer. Japan published December Labor Cash Earnings, which were down by 3.2% YoY, while Money Supply in January increased by 9.4%, surpassing expectations. The US will publish today the January NFIB Business Optimism Index, and December JOLTS Job Openings.

USD/JPY short-term technical outlook

The USD/JPY pair is trading just below the 50% retracement of its latest bullish run. The decline has paused but could resume on a break below 104.40, the next Fibonacci support level. The 4-hour chart shows that the 100 SMA converges with the latter, while the 20 SMA turned lower well above the current level. Technical indicators reached oversold levels and stalled their declines, barely bouncing.

Support levels: 104.40 104.05 103.70

Resistance levels: 104.95 105.30 105.75

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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