USD/JPY Forecast: Further falls expected on a break below 108.80

Valeria Bednarik FXStreet

USD/JPY Current Price: 108.98

Yen boosted by trade concerns, dollar pressured by dismal data.
USD/JPY turned bearish in the short-term, may approach 108.00.

The USD/JPY pair lost the 109.00 threshold and heads into the Asian a couple of pips below the figure, after hitting at the beginning of the day a fresh multi-month high of 109.72. The pair rallied on a better market mood coupled with encouraging Chinese data, but collapsed on poor US data and fears the US and China could back off a trade deal, following comments from different representatives from both economies. Mid-US afternoon, news indicate that the document on phase one was being written, but speculative interest preferred to ignore it.

At the beginning of the day, Japan released Q3 Capital Spending, which increased to 7.1% from 1.9% in the previous quarter, while the November Jibun Bank Manufacturing PMI improved to 48.9 from 48.6. This Tuesday, the country will only publish the November Monetary Base, seen up by 2.6% when compared to the previous month.

USD/JPY short-term technical outlook

The USD/JPY pair is short-term bearish according to the 4-hour chart, as it collapsed below its 20 SMA, which is now turning south, and about to challenge a directionless 100 SMA, first time near this last in over a week. Technical indicators, in the meantime, head south near oversold readings, barely losing their bearish momentum. The decline will likely accelerate on a break below 108.80, the immediate support.

Support levels: 108.80108.50 108.20

Resistance levels: 109.30 109.60 109.90

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 holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD hovers near 1.3600 as UK government crisis weighs on Pound Sterling

GBP/USD moves sideways after registering modest gains in the previous session, trading around 1.3610 during the European hours on Monday. The pair could come under pressure as the Pound Sterling may weaken amid a fresh government crisis in the United Kingdom.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.