USD/JPY Forecast: Rising bets for a test of 108.00

The bearish note in USD/JPY stays well and sound so far this week.
US-China trade concerns, Honk Kong turmoil add to JPY-buying.
FOMC minutes will be the salient event later today.

Pablo Piovano FXStreet

The Japanese yen continues to appreciate vs. its American counterpart so far this week, dragging USD/JPY to its third consecutive session with losses. The pair has extended the correction lower after Monday’s rejection from levels just above 109.00 the figure, area coincident with the critical 200-day SMA.

Moving forward, US-China trade developments and the impact on the broader risk-appetite trends should remain crucial for the pair’s price action as well as for the performance of global yields. In addition, the deterioration in the political/social scenario in Honk Kong has fuelled the already effervescent negotiations between China and the US.

USD/JPY short-term technical outlook

USD/JPY short-term technical outlook

Technically speaking, USD/JPY faces the immediate significant resistance at the 200-day SMA just below 109.00. A breakout of this area should open the door for a potential visit to peaks in the mid-109.00s recorded earlier in the month ahead of the psychological handle at 110.00 the figure. On the other hand, if the selling impetus picks up pace, the 55-day SMA should provide interim contention ahead of November’s low near 117.90. Below this area, the upside pressure is expected to subside.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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