USD/JPY Forecast: Modest recovery lacks follow-through

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.88

OPEC+ willing to resume talks to cut oil output supporting equities.
US Treasury yields seesawed between gains and losses, closed the day little changed.
USD/JPY maintains its negative tone despite recovering some ground.

The USD/JPY pair has bounced from a daily low of 106.97 to trade as high as 108.09 in the American session, ending the day a handful of pips below this last. The pair remained depressed throughout the day undermined by falling Treasury yields and a depressed dollar ahead of US data. Despite this last came in worse than expected, the market decided to return to its dollar longs, as Wall Street managed to advance, despite the dismal numbers. News that US President Trump has spoken with Russian President Putin and the Saudi Arabia Prince to work out a solution to their latest conflict amid oil production, triggered a sharp recovery of the black gold, which in turn, lent support to equities.

Meanwhile, US Treasury yields seesawed between gains and losses, ending the day pretty much unchanged. During the upcoming Asian session, Japan will release the Jibun Bank Services PMI for March, foreseen at 32.7 from 46.8 previously.

USD/JPY short-term technical outlook

The USD/JPY pair has recovered above the 38.2% retracement of its latest bullish run at 107.70, and it’s trading within a congestion of directionless moving averages in the 4-hour chart. Technical indicators in the mentioned time frame have recovered from daily lows, but lost their bullish strength before entering positive ground, limiting chances of additional gains ahead.

Support levels: 107.70 107.20 106.80

Resistance levels: 108.10 108.45 108.80

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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