USD/JPY Forecast: Keeps bearish perspective near 2020 lows

Valeria Bednarik FXStreet

Current price: 107.14

USD/JPY drops to fresh 2020 lows after the Fed cut rates.
Technical perspective favors a move toward October lows.

The USD/JPY pair fell to a near five-month low below 107.00 following Fed’s decision to cut the fund rate target y 50 bps to 1.00-1.25%. The dollar weakened across the board while the yield on the 10-year Treasury note fell below 1% for the first time in history. Even though stocks rallied as a knee-jerk reaction to the rate cut, Wall Street indexes fell back into negative territory as investors remain concerned over the potential consequences of the virus on earnings.

USD/JPY short-term technical outlook

Short-term technical outlook remains bearish for USD/JPY, with price trading below its main moving averages after losing around 500 pips from late-February highs. While indicators begin to look exhausted to the downside, the pair could take a breather over the next hours and consolidate near recent lows – in absence of more surprises – before making another bearish attempt below 106.92 aiming at October low at 106.48. On the flip side, the 200-day SMA stands as immediate resistance at 108.40. A break there could put the 109.00 area back in sight.

Support levels: 106.90 106.48 106.00

Resistance levels: 108.40 109.20 109.90

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 holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD hovers near 1.3600 as UK government crisis weighs on Pound Sterling

GBP/USD moves sideways after registering modest gains in the previous session, trading around 1.3610 during the European hours on Monday. The pair could come under pressure as the Pound Sterling may weaken amid a fresh government crisis in the United Kingdom.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.