USD/JPY Forecast: Investors holding on to safe-haven assets

Valeria Bednarik FXStreet

USD/JPY Current price: 107.48

The Japanese Jibun Bank Services PMI recovered from 26.5 to 45 in June.
The US reported over 50,000 new coronavirus cases in 24 hours fro a second consecutive day.
USD/JPY stuck within familiar levels and technically neutral.

It’s a holiday in the US, but low volumes are notable already in the European session. The USD/JPY pair is confined to a fifteen pips’ range ever since the day started, trading around the 107.50 price zone. The market sentiment is sour heading into the weekend, as the US has reported over 50,000 new coronavirus cases in 24 hours for two days in a row. Despite the country published an upbeat monthly employment report, concerns about the future of the economy weighed more.

Speculative interest ignored encouraging Japanese data, as the country published the June Jibun Bank Services PMI, which recovered from 26.5 to 45. Also, China released the Caixin Services PMI, which unexpectedly surged to 58.4 from 55 in May, and against the 49.9 expected. The macroeconomic calendar has nothing to offer for the rest of the day.

USD/JPY short-term technical outlook

The USD/JPY is ending the week with modest gains, although still lacking direction. The long-term perspective is neutral amid the safe-haven condition of both currencies. In the shorter-term, and according to the 4-hour chart, the pair is also neutral but has the potential of falling further, as technical indicators remain within negative levels, with modest downward slopes. In the meantime, the pair is stuck between directionless moving averages. The bearish case will be firmer on a break below 106.95, a Fibonacci support level.

Support levels: 107.20 106.95 106.60

Resistance levels: 107.95 108.30 108.65

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.

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