USD/JPY Forecast: Still stuck around 108.00 and at risk of falling

Valeria Bednarik FXStreet

USD/JPY Current price: 108.08

Japan will publish March National inflation and the April preliminary Manufacturing PMI.
US President Joe Biden said to be planning a capital gains tax hike.
USD/JPY holds at the lower end of its recent range near the 108.00 level.

The USD/JPY pair keeps trading around 108.10 but posted a lower low for a fourth consecutive day, this time at 107.80. The daily high was set at 108.22 during US trading hours, but the pair turned lower as stocks fell, following news indicating that US President Joe Biden is planning a capital gains tax hike to as high as 43.4%. Meanwhile, Republican senators proposed a$ 568 billion framework that includes funding for bridges, airports, roads and water storage that does not include tax increases.

Japan will publish March National inflation figures on Friday, with the headline Consumer Price Index foreseen at -0.1%. The core reading, which excludes fresh food prices, is expected to have remained unchanged at -0.4%. The country will also publish the preliminary estimate for the April Jibun Bank Manufacturing PMI, previously at 52.7.

USD/JPY short-term technical outlook

The near-term picture of USD/JPY offers a neutral-to-bearish stance. In the 4-hour chart, the pair is seesawing around a flat 20 SMA while still below the longer ones. Technical indicators head south within negative levels, although above their previous weekly lows. The risk is skewed to the downside, but the bearish momentum is limited.

Support levels: 107.80 107.50 107.10

Resistance levels: 108.30 108.70 109.10

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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