USD/JPY Forecast: Falling despite markets are in risk-on mode

Valeria Bednarik FXStreet

USD/JPY Current price: 109.43

The JPY surged on broad’s dollar’s weakness and despite a better market mood.
Japan has a busy Friday as it will publish multiple macroeconomic figures.
USD/JPY is poised to extend its decline in the near-term to sub-109.00.

The USD/JPY pair trades near a fresh weekly low of 109.42, accelerating its decline after the release of poor US growth figures. The pair spent the first half of the day consolidating just below the 110.00 threshold trapped between the broad dollar’s weakness and rallying equities. Stocks retained the positive tone despite poor US GDP, backed by Fed’s on-hold stance. In the meantime, US government bond yields ticked higher, reflecting a better market’s mood.

On the data front, Japan has a busy Friday. The country will publish the June Unemployment Rate, May Retail Trade figures, the preliminary estimate of June Industrial Production and Housing Starts for the same month.

USD/JPY short-term technical outlook

The USD/JPY pair hovers around the daily low, bearish in the near-term. The 4-hour chart shows that an intraday advance met sellers around a bearish 20 SMA, which extends its decline below the longer ones. Technical indicators lack directional strength but hold within negative levels, skewing the risk to the downside.

Support levels: 109.20 108.70 108.25

Resistance levels: 109.80 110.15 110.50

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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