USD/JPY Forecast: Ready to pierce July’s monthly low

Valeria Bednarik FXStreet

USD/JPY Current price: 104.31

Japan National inflation increased by just 0.2% in August.
US Michigan Consumer Sentiment Index is foreseen at 75 in September.
USD/JPY at fresh monthly lows as bears keep pressuring.

As the American dollar remains weak, the USD/JPY pair trades at fresh monthly lows. The pair fell to 104.29, and trades nor far above this last. Equities opened lower in Europe, triggering the latest decline, now struggling around their opening levels, reflecting a sour market mood, after most central banks announced on-hold stances, without anticipating additional easing in the near-term.

In the data front, Japan published August National inflation figures at the beginning of the day, which missed expectations. Annual CPI increased by just 0.2%, while the core reading came in at -0.4% as expected. The US session will bring the preliminary estimate of the September Michigan Consumer Sentiment Index, foreseen at 75 from 74.1 in August.

USD/JPY short-term technical outlook

The decline in USD/JPY is far from over. The 4-hour chart shows that the pair keeps developing below a firmly bearish 20 SMA, while the larger ones slowly turn south well above the shorter one, signaling strong selling interest in the short-term. Technical indicators are directionless although well into negative territory. The immediate support level is 104.18 July monthly low, with a break below it anticipating a steeper decline ahead.

Support levels: 104.20 103.85 103.40

Resistance levels: 104.65 105.10 105.50

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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