USD/JPY Forecast: Sitting below the 105.00 threshold

Valeria Bednarik FXStreet

USD/JPY Current price: 104.88

Japanese manufacturing PMI resulted at 49.8 in January, slightly better than the previous.
US ISM Manufacturing PMI is foreseen at 60 in January from 60.7 in the previous month.
USD/JPY holds on to gains, could extend its advance once beyond 104.95.

The dollar is up, despite a generally better market’s mood, with USD/JPY trading just below the 105.00 threshold. Equities are firmly up in Asia and Europe, although US Treasury yields are unable to pick up, losing some ground ahead of the opening. A group of US Republican senators have called for President Joe Biden to scale down his stimulus plan, somehow affecting the ruling optimism.

Japan released the January Jibun Bank Manufacturing PMI, which came in at 49.8, slightly better than the previous 49.7 estimate. Later in the day, Markit will publish the final reading of its US January Manufacturing PMI, foreseen unchanged from the preliminary estimate at 59.1. The country will also publish the official ISM Manufacturing PMI, foreseen at 60 from 60.7 in the previous month.

USD/JPY short-term technical outlook

The USD/JPY pair is bullish in the near-term and according to the 4-hour chart. The pair is trading far above its moving averages, with the 20 SMA heading north almost vertically. Technical indicators lack directional strength, but stand well into positive levels, with the RSI around 72. Another bullish run should be expected on a break above the 104.95 resistance level.

Support levels: 104.40 104.00 103.70

Resistance levels: 104.95 105.20 105.65

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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