USD/JPY Forecast: Hopes US data can wake up the pair
USD/JPY Current price: 107.77
- US to publish April Durable Goods Orders and the second version of Q1 GDP.
- The market’s sentiment remains torn between fears and hopes.
- USD/JPY neutral, although the bearish potential continues to be limited.
The USD/JPY pair continues to trade lifeless in a well-limited range, incapable to attract speculative interest. The so-far rhetorical war between China and the US dents investors’ mood, who struggle to bet on economic reopenings. And while the worst of the coronavirus crisis seems to be over in Europe and the US, there are still new contagions and deaths. The only positive development is that health systems are not overloaded and can deal with the new cases. Still, conservative measures persist to avoid a second wave.
Attention now shifts to US data, as the country will release April Durable Goods Orders, seen plunging by 19%, which would be a new record fall. It will also publish the second version of Q1 GDP, seen unchanged at -4.8%, and Initial Jobless Claims for the week ended May 22, seen printing 2.1 million.
USD/JPY short-term technical outlook
The USD/JPY pair has been trading between 107.30 and 108.10 for almost two weeks, technically neutral. The potential of a bearish extension seems limited in the short-term, as the 4-hour chart shows that the pair is holding above a flat 20 SMA, while the 100 SMA advances below the 200 SMA. Technical indicators, however, have turned lower within neutral levels. The pair would need to clear one of the extremes of the range to have chances of gain some directional traction, although, given the ruling uncertainty, it would require a strong catalyst to trigger it.
Support levels: 107.30 106.90 106.65
Resistance levels: 108.10 108.45 108.80
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.
