USD/JPY Forecast: Sliding alongside US government bond yields

Valeria Bednarik FXStreet

USD/JPY Current price: 109.09

Japan celebrates the Golden Week, a series of holidays that will maintain banks closed until Thursday.
US Treasury yields eased amid a better market’s mood, weighing on USD/JPY.
USD/JPY is technically neutral, could turn bearish on a break below 108.60.

The USD/JPY pair peaked at 109.69 at the beginning of the day but changed course ahead of the US opening, falling to 108.89, to finally settle around 109.10. The pair fell alongside US government bond yields, which reacted to the better market mood. US stocks advanced after US data confirmed that substantial economic growth continued in April. The yield on the 10-year Treasury note settled at 1.60%.

Japanese markets will remain closed amid different local holidays until next Thursday, which means the macroeconomic calendar will remain empty.

USD/JPY short-term technical outlook

The USD/JPY pair is neutral in the near-term, with the bearish potential limited by a strong static support level at 108.60. Declines toward the level may attract buyers. The 4-hour chart shows that the pair is trading just above a flat 20 SMA, while between the longer ones. Technical indicators retreated sharply from overbought readings to lose directional strength around their midlines.

Support levels: 108.90 108.60 108.25

Resistance levels: 109.60 110.00 110.45

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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