USD/JPY Forecast: Losing bullish potential

Valeria Bednarik FXStreet

USD/JPY Current price: 109.28

Japan will publish early on Monday the April Producer Price Index.
US Treasury yields retreated on poor US data, weighing on the greenback.
USD/JPY is poised to extend its slide, although a bearish continuation is not yet confirmed.

The USD/JPY pair eased on Friday but got to close the week with gains around 109.30. The pair responded to a better market mood that pushed equities higher and government bond yields lower, unable to find a clear direction. The yield on the 10-year US Treasury note settled at 1.63% after flirting mid-week with the 1.70% threshold, as worse-than-expected US data cooled inflationary concerns.

Data wise, Japan published on Friday, April Money Supply, which was up by 9.2% YoY. Early on Monday, the country will release the April Producer Price Index, foreseen up by 3.1% YoY, much better than the previous 1%. It will also publish April Machine Tool Orders, previously at 65%.

USD/JPY short-term technical outlook

The USD/JPY pair has lost its bullish strength, but its bearish potential seems limited at the time being. The daily chart shows that technical indicators ease within positive levels but also that they remain above their midlines. Meanwhile, the pair is well above a flat 20 SMA, currently at around 108.70, while the longer ones advance far below it. The 4-hour chart shows that the pair is meeting buyers around a bullish 20 SMA but holding nearby, while technical indicators accelerated their slides and approach their midlines from above.

Support levels: 109.10 108.70 108.15

Resistance levels: 109.70 110.10 110.50

View Live Chart for the USD/JPY

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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 hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.