USD/JPY Forecast: Pressuring highs but still below 108.10

Valeria Bednarik FXStreet

USD/JPY Current price: 107.78

The Japanese Monetary Base expanded by 3.9% YoY in May, better than the 2.1% expected.
Economic reopenings in Europe and a drastic fall in COVID-19 cases boost the mood.
USD/JPY needs to trigger stops gathered above May 19 high at 108.08.

The greenback remains the weakest currency across the FX board, as tensions in the US spook investors. The USD/JPY pair, however, remains within familiar levels, trading below the 108.00 threshold. Safe-haven assets are generally weaker, as investors are optimistic about economic reopenings throughout Europe, as the coronavirus-related numbers fall drastically. Equities are up, limiting the downside for the pair, although sluggish dollar’s demand will likely prevent it from breaking higher.

Overnight, news indicated that the Japanese Monetary Base expanded by 3.9% YoY in May, better than the 2.1% expected. The US macroeconomic calendar will include today the ISM-NY Business Conditions Index for May, previously at 4.3.

USD/JPY short-term technical outlook

The USD/JPY pair is trading at the upper end of its latest range, and with the risk skewed to the upside in the short-term. The 4-hour chart shows that the pair is above all of its moving averages, with the 100 SMA advancing above the 200 SMA, but below a mild-bearish 20 SMA. The Momentum indicator heads sharply higher within positive levels, but the RSI indicator lacks directional strength, flat at around 55. The top of the range is the 108.10 price zone, as the pair reached a high of 108.08 on May 19. Stops should gather above this last and if those get triggered, the pair may finally see some action.

Support levels: 107.30 106.90 106.65

Resistance levels: 108.10 108.45 108.80

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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