USD/JPY Forecast: Sentiment keeps leading the way

Valeria Bednarik FXStreet

USD/JPY Current price: 104.48

Optimism persists, although Brexit woes put a halt to stocks’ rallies.
The US will present several macroeconomic reports amid the Thanksgiving long weekend.
USD/JPY is neutral-to-bullish in the near-term, needs to clear the 104.70 resistance.

The market’s mood continues seesawing and so does the dollar. The American currency fell against high-yielding rivals throughout the Asian morning amid persistent optimism and equities rallying, although it later recovered, as the sentiment suffered a set-back. Ursula von der Leyen, European Commission leader, said that she cannot tell if in the end there will be a Brexit trade deal. Equities came under pressure, providing support to the Japanese currency.

Japan published the October Corporate Services PMI, which fell by 0.6% YoY, much worse than the 1.2% advance expected. The US has quite a busy macroeconomic calendar this Wednesday, amid the upcoming Thanksgiving holiday. The country will publish October Durable Goods Orders, seen up by 0.9%, and the second estimate of Q3 Gross Domestic Product, seen steady at 3.7% QoQ. The annualized figure is expected to be upwardly revised to 33.2%. The US will also release employment-related figures, among other data.

USD/JPY short-term technical outlook

The USD/JPY pair is modestly bouncing from a daily low at 104.3,3 maintaining its neutral-to-bullish stance. The 4-hour chart shows that the pair is hovering around its 100 SMA, although still above a firmly bullish 20 SMA. Technical indicators remain directionless within positive levels, while a bearish 200 SMA caps advances now around 104.70.

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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