USD/JPY Forecast: Keeps bearish perspective near 2020 lows
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.
