USD/JPY Forecast: Increased bullish potential

Valeria Bednarik FXStreet

USD/JPY Current price: 109.42

The dollar advances as the US economy keeps giving encouraging signs.
The macroeconomic calendar will be light ahead of key employment data later in the week.
USD/JPY has recovered its near-term bullish potential, needs to advance above 109.70.

The American currency recovers some ground on Tuesday, with USD/JPY trading in the 109.40 price zone. The US recovery is evident as the immunization campaign continues, and reopenings in several states are fueling optimism. Data released on Monday missed expectations but, anyway, reaffirmed the economic advance toward pre-pandemic levels.

Federal Reserve chief Jerome Powell commented on economic progress, although adding a pinch of caution mainly centered on the employment sector. Meanwhile, US Treasury yields are up, as most Asian markets edged lower. European indexes struggle to post some gains, although US futures are recovering ground.

The macroeconomic calendar has little to offer today. The US will publish the March Goods Trade Balance and Factory Orders for the same month. It will also unveil the April ISM-NY Business Conditions Index.

USD/JPY short-term technical outlook

From a technical point of view, the USD/JPY pair has room to extend its advance. The 4-hour chart shows that it is advancing above all of its moving averages as the 20 SMA accelerates its advance, crossing the longer ones. The Momentum indicator advances within positive levels as the RSI is stable at around 62, in line with increased buying interest.

Support levels: 109.15 108.70 108.25

Resistance levels: 109.70 110.10 110.50

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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