USD/JPY Forecast: Easing within range

Valeria Bednarik FXStreet

USD/JPY Current price: 107.47

Japan’s manufacturing output contracted by more than expected in Q2.
The US will publish the ADP employment survey and the ISM Manufacturing PMI.
USD/JPY eases after hitting 108.16 could accelerate its decline once below 107.30.

The USD/JPY pair has peaked at 108.16 early Asia as demand for the greenback persisted following Wall Street’s close. US indexes enjoyed their best quarter in two decades, despite the ongoing coronavirus-related crisis that has put the world’s largest economies at a brink of recession. The dollar gave mid-Asian session as local equities were unable to follow the lead of their American counterparts. The pair retreated from the mentioned high to trade around 107.50, as European equities also trade mixed.

Japan published the Tankan Large Manufacturing Index for Q2, which fell to-34, worse than the -31 expected. The June Jibun Bank Manufacturing PMI printed at 40.1, better than the 37.8 expected, while the Consumer Confidence Index for the same month surged to 28.4, beating the market’s forecast.

The US session will be focused on employment and growth, as the country will release the ADP survey ahead of the Nonfarm Payroll report to be out on Thursday. The private sector is expected to have added 3 million new jobs in June. Also, the US will publish the ISM Manufacturing PMI, seen in June at 49.5 from 43.1 in May.

USD/JPY short-term technical outlook

The USD/JPY pair is trading at daily lows and piercing a Fibonacci support level, the 38.2% retracement of the latest daily decline. In the 4 hour chart, it is back below its 20 and 200 SMA, and still above a bearish 100 SMA. Technical indicators, in the meantime, eased from overbought readings, but pared their declines near their midlines, indicating easing selling interest. The decline could gather momentum if the pair falls below 107.30, the immediate support.

Support levels: 107.30 106.95 106.60

Resistance levels: 107.95 108.30 108.65

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.