USD/JPY Forecast: Receding dollar’s demand on risk-appetite

Valeria Bednarik FXStreet

USD/JPY Current price: 104.30

US President Donald Trump authorized the transition with Joe Biden’s staff.
Consumer Confidence in the U is seen contracting to 97.7 from 100.9.
USD/JPY with limited bullish potential, downside limited by 103.95.

After peaking at 104.64, the USD/JPY pair retreated as the dollar resumed its decline this Tuesday. The pair is anyway holding above the 104.00 level, with a modest bullish bias, as the sentiment is upbeat. Asian and European indexes trade in the green, pushing Wall Street higher.

In the US, several states have begun certifying results from the presidential election, and despite President Donald Trump´s insistence on his legal battle, he authorized the beginning of the transition with Joe Biden’s staff. The news brought some relief to US markets.

Japan didn’t publish macroeconomic data today, and the US has a light calendar ahead. The only relevant figure is CB Consumer Confidence, foreseen at 97.7 from 100.9.

USD/JPY short-term technical outlook

The USD/JPY pair is trading around 104.30, and the short-term picture is neutral-to-bullish. The 4-hour chart shows that the pair s below a mildly bearish 100 SMA, while the 20 SMA advances below the current level. Technical indicators eased from intraday highs but pared their declines within positive levels and are slowly turning higher, indicating little interest for the safe-haven yen. The pair could turn bearish on a break below 103.95, a strong static support level.

Support levels: 103.95 103.50 103.15

Resistance levels: 104.65 105.00 105.40

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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