USD/JPY Forecast: Fear likely to keep supporting the JPY

Valeria Bednarik FXStreet

USD/JPY Current Price: 108.09

Japan to release the December Jibun Bank Manufacturing PMI, previously at 48.8.
Tensions between the US and Iran likely to escalate, safe-haven assets taking the most out of it.
USD/JPY bearish and at two-month lows, decline set to continue.

The USD/JPY pair has fallen to 107.83, it’s lowest in almost three months, as speculative interest rushed into safety following news that the US killed a top Iranian Commander. Fear dominated the financial world, fueling demand for safe-haven assets, while dismal US data added to the bearish case of the pair, with the US ISM Manufacturing PMI hitting its lowest in ten years. The yield on the benchmark 10-year Treasury note fell to 1.79%, its lowest in a month, while worldwide indexes closed in the red. Japan will release this Monday the December Jibun Bank Manufacturing PMI, previously at 48.8.

USD/JPY short-term technical outlook

The USD/JPY pair finished the week just above 108.00, and around its 100 DMA, the first time around this last in over two months. It also broke below the 20 and 200 DMA, while daily indicators head south almost vertically and near oversold levels, all of which skew the risk to the downside. In the 4-hour chart, the pair is at risk of falling further, as, despite technical indicators recovered modestly from oversold levels, they hold below a bearish 20 SMA, which extends its slide below the larger ones.

Support levels: 107.70 107.30 106.95

Resistance levels 108.45 108.90 109.30

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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