USD/JPY Forecast: Still stuck around 107.70

Valeria Bednarik FXStreet

USD/JPY Current price: 107.64

The market’s mood improved as crude oil prices pared their slumps.
The better performance of equities weighs on the dollar’s demand.
USD/JPY has been trading neutral for over a week already.

Markets are in better shape this Wednesday, amid oil prices looking more stable, following a historic collapse. Asian indexes managed to recover their previous losses, underpinning their European counterparts. In this scenario, the greenback is weaker against its high-yielding rivals, although USD/JPY remains unmoved, stuck around the 107.70 price zone.

Investors, however, are far from optimistic, as the economic deadlock persists. Crude prices have stabilized, but remain at record lows, and there’s no return of demand in the foreseeable future. That said, the recovery in stocks is mostly linked to some solid earnings reports announced late Tuesday, and yet another stimulus package coming from the US. Given that the US won’t release economic data, the upcoming sessions will depend once again on sentiment.

USD/JPY short-term technical outlook

The USD/JPY pair retains its neutral stance, as it has been hovering around the current level for over a week. The 4-hour chart shows that the price converges with directionless moving averages, which stand in a tight range. Technical indicators, in the meantime, move back and forth around their midlines, without directional strength. The base of the range this week comes around 107.20, with a clear break below favouring a slide toward the 106.50 region.

Support levels: 107.20 106.95 106.50

Resistance levels: 108.10 108.50 108.85

View Live Chart for the USD/JPY

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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