USD/JPY Forecast: On the rise amid better market mood

Valeria Bednarik FXStreet

USD/JPY Current price: 109.24

Equities are on the rise, US government debt yields are also up.
There are modest signs in Italy and Spain that the pandemic curves are flattening.
USD/JPY could extend its advance towards the 110.00 price zone once above the daily high.

The financial markets seem to be in better mood at the beginning of the week, as equities in Asian and Europe are posting substantial gains, pushing US futures higher. Treasury yields are also firmly up, with the yield on the benchmark 10-year note peaking at 0.66%, after ending Friday at 0.59%. The USD/JPY pair hit 109.38 so far today, trading at around 109.20, so far unable to advance beyond the 23.6% retracement of March’s rally.

The positive sentiment is being attributed to some good news related to the coronavirus pandemic. The contagion and the death curves seem to be flattening in Italy and Spain, bringing some hopes about some sort of normalization at sight.

Japan released at the beginning of the day, March Consumer Confidence, which resulted at 30.9 from 38.4 in February. The US won’t release relevant data today.

USD/JPY short-term technical outlook

The USD/JPY pair is neutral-to-bullish, stuck to the mentioned Fibonacci level. The 4-hour chart shows that the pair is comfortable above all of its moving averages for the first time in over a week. Technical indicators in the mentioned chart hold directionless well above their midlines, indicating the absence of selling interest at the time being. The pair would need to accelerate through the mentioned daily high to gather additional momentum and extend its advance toward the 110.00 region.

Support levels: 108.70 108.25 107.90

Resistance levels: 109.40 109.80 110.15

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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