USD/JPY Forecast: Holding neutral below 110.00
USD/JPY Current price: 109.85
- Better performance of equities overshadows a cautious stance among investors.
- Focus on Fed Chief Powell’s testimony before the Congress.
- USD/JPY needs to surpass the critical 110.00 threshold to turn bullish short-term.
The financial world seems to be in a better mood this Tuesday, leading to modest gains in USD/JPY. The pair, however, remains below the 110.00 figure, as news related to the coronavirus outbreak continue to weigh, keeping investors in cautious mode. Headlines are mixed, as while there are signs that the outbreak is topping, the WHO Chief said Tuesday that it poses a “very grave threat for the rest of the world,” despite remarking that it seems contained within China.
The better performance of Wall Street led to gains in Asian equities, while European ones are replicating the positive behaviour. Treasury yields extend their recovery, advancing modestly ahead of the market’s opening, also reflecting a better market mood.
The US session will bring US Federal Reserve Chief, Jerome Powell, testimony before the Congress. His prepared remarks will be released over an hour ahead of the event, and would likely have an impact on the market. After reading his comments, Powell will be submitted to a long Q&A, and his answers may also trigger some action across the board.
USD/JPY short-term technical outlook
The USD/JPY pair is trading near a daily high of 109.94, still neutral according to the 4-hour chart, although with the bearish potential limited as the pair is stuck to a flat 20 SMA, while above the larger ones, which also lack directional strength. The Momentum indicator is flat around its mid-line, while the RSI consolidates around 60. The pair would need to clear the 110.00 threshold to be able to extend its gains.
Support levels: 109.40 109.00 108.65
Resistance levels: 110.00 110.35 110.70
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.
