USD/JPY Forecast: Persistent pressure exposes July low

Valeria Bednarik FXStreet

USD/JPY Current price: 104.74

The Bank of Japan left its monetary policy unchanged and upgraded its economic assessment.
US Initial Jobless Claims are foreseen at 850K in the week ended September 11.
USD/JPY is bearish and poised to test the 104.18 low set last July.

The Japanese yen is among the strongest dollar’s rivals this Thursday, as USD/JPY trades around 104.70, its lowest since last July. The day kick-started with the Bank of Japan monetary policy decision. As widely expected, the central bank left its monetary policy unchanged, while upgrading its economic assessment. Policymakers said that the economy has started to pick up “gradually,” following the setback caused by the coronavirus pandemic. As usual, they reiterated that would add easing if necessary, although without hinting any action for the foreseeable future.

The announcement followed a similar one from the US Federal Reserve, which put the greenback under pressure. Powell & CO. also kept the monetary policy on hold and were quite reluctant to anticipate additional stimulus, despite reaffirming their commitment to do whatever it takes to support the economy. The focus today will be on US employment data, as Initial Jobless Claims for the week ended September 11 are expected at 850K from 884K in the previous month.

USD/JPY short-term technical outlook

The USD/JPY pair is pressuring daily lows, maintaining its bearish stance in the short-term. The 4-hour chart shows that it remains well below a bearish 20 SMA, which keeps accelerating south below the larger ones. Technical indicators, in the meantime, have stabilized well into negative territory, after correcting extreme oversold conditions. The pair has room to extend its decline towards 104.18, July low, should the pressure remain on the greenback.

Support levels: 104.70 104.20 103.85

Resistance levels: 105.10 105.50 106.00

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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