USD/JPY Forecast: Poised to challenge the monthly low at 104.33

USD/JPY Current price: 104.62

• US Durable Goods Orders expected to have posted a modest advance in September.
• The market mood is still down amid the usual concerns related to the ongoing pandemic.
• USD/JPY is technically bearish in the near-term, could reach fresh monthly lows sub-104.00.

The USD/JPY pair remains under mild-pressure this Tuesday, as the market’s mood is sour. The looming US election, resurgent cases of coronavirus in Europe and the US and no progress in a US stimulus package are behind the investors’ apathy.  The next week will be critical in terms of events and data.  Meanwhile, equities trade in the red, extending their latest declines. US Treasury yields are also lower, in line with USD/JPY slide, now trading in the 104.60 price zone.

In the data front, the Japanese macroeconomic calendar had nothing to offer this Tuesday, but the US session will bring the country’s Durable Goods Orders for September, expected to have increased by 0.5% in the month, matching the previous reading. The core reading, Nondefense Capital Orders ex Aircraft, are foreseen at 0.5% from 1.9%.  Later into the session, the focus will be on the CB Consumer Confidence, foreseen at 102.1 from 101.8 in September.

USD/JPY short-term technical outlook

The USD/JPY pair seems poised to extend its decline, as it is trading near its monthly low at 104.33. The pair has slid below its 20 SMA, which is currently directionless around 104.75, while the larger moving averages maintain their bearish slopes far above the shorter one. Technical indicators, in the meantime, head lower, the Momentum within neutral levels but the RSI accelerating lower at around 38, favoring a downward extension for the upcoming hours.

Support levels: 104.30 103.95  103.50

Resistance levels: 105.00 105.40 105.80

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