USD/JPY Forecast: Optimism hits safe-haven currencies

Valeria Bednarik FXStreet

USD/JPY Current price: 106.44

US Treasury yields accelerated their recovery, providing support to USD/JPY.
US housing-related data and Consumer Confidence coming up next.
USD/JPY is bullish in the short-term, support at 106.30.

An upbeat market mood is lifting USD/JPY, which now trades at daily highs in the 106.40 price zone. Support is coming from US Treasury yields, surging ahead of the US opening, reflecting the market’s optimism. Equities, on the other hand, are not doing that good after Monday stellar performance. European indexes are just marginally higher, while US ones hold on to yesterday gains. In general, the greenback is weaker against most major rivals, except those considered safe-havens.

The macroeconomic calendar had nothing to offer during Asian trading hours, although European figures released today were generally encouraging. The US session will bring housing-related data, included July New Home Sales, and the CB Consumer Confidence, foreseen at 93 from the previous 92.6.

USD/JPY short-term technical outlook

The USD/JPY pair is now above the 61.8% retracement of its latest daily decline, measured between 107.04 and 105.09, at 106.29. In the 4-hour chart, the pair has rallied above all of its moving averages, which anyway lack clear directional strength. Technical indicators, in the meantime, advanced within positive levels, partially losing their bullish strength but still heading north. Further gains are expected on a break above 106.70, the immediate resistance, towards fresh monthly highs beyond 107.05.

Support levels: 106.30 105.90 105.50

Resistance levels: 106.70 107.05 107.40

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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