USD/JPY Forecast: Higher yields give the dollar some strength

Valeria Bednarik FXStreet

USD/JPY Current price: 109.67

The market sentiment remains subdued amid coronavirus-related concerns.
The yield on the US 10-y Treasury note is on the rise.
USD/JPY is recovering ground, further gains are still unclear.

The dollar recovers some ground ahead of the weekly close, with USD/JPY trading up to the 109.70 price zone. Across the board, the greenback trades mixed, lacking strength after dovish comments from US Federal Reserve chief Jerome Powell.

Stocks trade up, but the market’s sentiment is far from optimistic, amid concerns related to the AstraZeneca vaccine delaying further immunization in Europe, and the rising number of global coronavirus cases, mainly centred in the Southern Hemisphere, where the cold season began. The greenback’s advance is directly linked to government bond yields, as the yield on the 10-year Treasury note is up to 1.67%.

On the data front, Japan didn’t publish macroeconomic data. The US has a light calendar, as it will publish the March Producer Price Index and February Wholesale Inventories.

USD/JPY short-term technical outlook

The USD/JPY pair has a limited bullish scope, according to intraday technical readings. In the 4-hour chart, the pair is hovering around the 20 and 100 SMAs, with the shorter one maintaining its bearish slope. Technical indicators have recovered from oversold readings but are losing strength below their midlines. A bullish acceleration through 109.95 should put the pair in the bullish path.

Support levels: 109.40 109.00 108.65

Resistance levels: 109.95 109.30 110.60

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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