USD/JPY Forecast: Pressure remains despite improving mood

Valeria Bednarik FXStreet

USD/JPY Current price: 105.47

Japan´s Merchandise Trade Balance is foreseen at ¥-37.5 B in August from ¥10.9 B previously.
US Treasury yields ticked higher as investors wait for the US Federal Reserve.
USD/JPY is at risk of extending its slump after reaching fresh September lows.

The USD/JPY pair extended its weekly decline to 105.29, a fresh September low, recovering some ground ahead of the close, amid rising equities and US government bond yields. Nevertheless, the pair is clearly reflecting the lack of interest in the greenback, ahead of the US Federal Reserve monetary policy decision. The dollar remained under selling pressure despite a better market mood, this last backed by upbeat Chinese data. US indexes traded in the green throughout the session, advancing for a second consecutive day. US Treasury yields, in the meantime, ticked higher.

Japan will publish this Wednesday the August Merchandise Trade Balance, foreseen at ¥-37.5 B from ¥10.9 B in the previous month. Imports are expected to have dropped 18% while exports are seen down by 16.1%.

USD/JPY short-term technical outlook

The USD/JPY pair is trading around the 105.50 level, and still at risk of falling, according to the 4-hour chart. The pair fell further below all of its moving averages, with the 20 SMA accelerating south below the larger ones. Technical indicators, in the meantime, have barely bounced from their daily lows, lacking enough strength to anticipate a recovery.

Support levels: 105.10 104.70 104.40

Resistance levels: 106.00 106.35 106.70

View Live Chart for the USD/JPY

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.