USD/JPY Forecast: Modest recovery within familiar levels

Valeria Bednarik FXStreet

USD/JPY Current price: 103.99

A better market mood helped USD/JPY to recover some ground.
All eyes are on Janet Yellen speech scheduled for this Tuesday.
USD/JPY is technically neutral, needs to advance past 104.40.

The market’s mood is in better shape this Tuesday, weighing on safe-haven dollar and yen. The sentiment was boosted by comments from former Fed’s chair Janet Yellen, who has been nominated by Joe Biden as Treasury Secretary. Yellen is meant to speak in front of the Senate Finance Committee. Her prepared remarks are already out, showing that she believes that is time to “act big,” spend now and worry about deficits later. “In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.” Stocks are up, as well as government bond yields.

Data wise, the calendar has little to offer. Japan didn’t publish macroeconomic figures, while the US has scheduled some bonds auctions.

USD/JPY short-term technical outlook

The USD/JPY pair is trading around 104.00, also around the 23.6% retracement of its January advance. In the 4-hour chart, it has advanced above all of its moving averages, which anyway remain directionless. Technical indicators recovered to above their midlines but quickly lost directional strength, indicating limited buying interest. A long-term descendant trend line offers resistance in the 104.30 area, while the monthly high has been set at 104.39.

Support levels: 103.50 103.15 102.70

Resistance levels: 104.05 104.40 104.80

View Live Chart for the USD/JPY

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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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