USD/JPY Forecast: Increased chances of a bearish correction

Valeria Bednarik FXStreet

USD/JPY Current price: 109.95

Markets in a better mood this Wednesday, providing support to USD/JPY.
US Treasury yields bounced just modestly from fresh two-week lows.
USD/JPY could turn bearish on a break below 109.70.

The USD/JPY pair is trading just below the 110.00 figure, marginally higher daily basis as fears have receded, although not completely disappeared. Concerns about a deadly virus outbreak in China remain, moreover after the US confirmed a case. Chinese authorities, however, cooled down concerns stating they are taking measures to control it.

Asian equities recovered, leading to an advance in European ones, which hold in the green. US Treasury yields are also recovering after falling to two-week lows on Tuesday. Japan didn’t release macroeconomic data during the Asian session. As for the US, the country will release some minor figures, including the Chicago Fed National Activity Index for December, and Existing Home Sales for the same month.

USD/JPY short-term technical outlook

The USD/JPY pair reached a daily high of 110.09 but was unable to hold on to gains. The short-term picture is bearish, according to the 4-hour chart, as the 20 SMA is slowly turning south above the current level, providing intraday resistance. Technical indicators, in the meantime, remain within negative levels, although lacking directional strength. The pair could accelerate its decline on a break below 109.70, the immediate support, exposing then the 109.00 figure.

Support levels: 109.70 109.35 109.00

Resistance levels: 110.10 110.40 110.75

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 looks offered below 1.1900

EUR/USD keeps its bearish tone unchanged ahead of the opening bell in Asia, returning to the sub-1.1900 region following a firmer tone in the US Dollar. Indeed, the pair reverses two consecutive daily gains amid steady caution ahead of Wednesday’s key US Nonfarm Payrolls release.

GBP/USD slips back to daily lows near 1.3640

GBP/USD drops to daily lows near 1.3640 as sellers push harder and the Greenback extends its rebound in the latter part of Tuesday’s session. Looking ahead, the combination of key US releases, including NFP and CPI, alongside important UK data, should keep the pound firmly in focus over the coming days.

Gold the battle of wills continues with bulls not ready to give up

Gold remains on the defensive and approaches the key $5,000 region per troy ounce on Tuesday, giving back part of its recent two day. The precious metal’s pullback unfolds against a firmer tone in the US Dollar, declining US Treasury yields and steady caution ahead of upcoming key US data releases.

Bitcoin's downtrend caused by ETF redemptions and AI rotation: Wintermute

Bitcoin's (BTC) fall from grace since the October 10 leverage flush has been spearheaded by sustained ETF outflows and a rotation into the AI narrative, according to Wintermute.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.