USD/JPY Forecast: Dollar bulls give up, for now

Valeria Bednarik FXStreet

USD/JPY Current price: 106.58

A better market mood plays against the greenback, focus on economic re-openings.
US Consumer Confidence is seen plummeting in May amid ongoing lockdowns.
USD/JPY bearish and challenging the 106.50 static support level.

The mood is up, and the dollar is down. Despite equities are firmly higher, and Wall Street poised to open with substantial gains, the USD/JPY pair is down, trading at its lowest in over a month in the 106.50 price zone. The market is all about unwinding dollar’s longs, amid mounting hopes economies will open the path to normality. Europe seems the best poised to do so, although some US states are also easing lockdown measures.

In the data front, Japan published its March unemployment rate, which ticked higher to 2.5% as expected. The US will publish March Trade Balance, and the CB Consumer Confidence index, seen at 88.3 from 120.0 previously.

USD/JPY short-term technical outlook

The USD/JPY pair trades near its daily low, with a firm bearish tone in the short-term, although given the market’s behaviour the greenback may get some demand during US trading hours.

From a technical point of view, the 4-hour chart shows that the pair is accelerating south below all of its moving averages, with the 20 SMA gaining downward strength. Technical indicators turned lower and maintain their bearish momentum below their midlines, in line with further declines ahead.

Support levels: 106.50 106.10 105.80

Resistance levels:106.75 107.30 107.70

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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