USD/JPY Forecast: Strong selling interest aligned around 107.70

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.27

The Japanese Leading Economic Indicator fell in March to 83.8.
US Treasury yields and US equities edged lower, adding pressure on the pair.
USD/JPY easing from its recent highs, sellers still cautious.

The USD/JPY pair eased this Tuesday amid a dismal market’s mood, although ti held at the upper end of Monday’s range. The pair trades in the 107.20 price zone after being unable to advance beyond the 107.70 strong static resistance area. The Japanese yen appreciated at the beginning of the day on the back of rising concerns about a possible second wave of coronavirus after China reported at least six new cases in Wuhan. During US trading hours, falling Treasury yields and Wall Street turning red added pressure on the pair.

Japanese data released at the beginning of the day was extremely disappointing, as the preliminary estimate Leading Economic Indicator fell to 83.8 in March from 91.9, the biggest monthly drop on record. The Coincident Index for the same period, dropped to 90.5 from 95.4, the fastest pace of decline in almost a decade. During the upcoming Asian session, Japan will publish the March Trade Balance, and the April Eco Watchers Survey.

USD/JPY short-term technical outlook

The 4-hour chart shows that the pair retreated from a bearish 200 SMA, although it continues developing above the 20 and 100 SMA, with the shortest about to cross above the larger one. Technical indicators, in the meantime, eased from overbought levels, heading lower within positive levels. Bears seem cautious at the time being, with a steeper decline expected on a break below 106.90, now the immediate support.

Support levels: 106.90 106.50 106.20

Resistance levels: 107.70 108.00 108.40

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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