USD/JPY Forecast: Turning short-term bullish

Valeria Bednarik FXStreet

USD/JPY Current Price: 106.55

US Treasury yields jumped to fresh one-month highs, underpinning USD/JPY.
Dollar’s demand resurged on hopes surrounding US economic growth.
USD/JPY at its highest for the month and with room to extend gains towards 107.00.

The USD/JPY pair jumped to a fresh August high of 106.68, trading nearby as the US session came to an end. The pair advanced just modestly throughout the first half of the day, as speculative interest rushed into high-yielding assets. The pair surged mid-US session, as US government bonds fell, sending Treasury yields to fresh one-month highs. The yield on the benchmark 10-year note reached 0.66%, settling not far below this last.

Japanese data released at the beginning of the day was mixed, as the country published the June Current Account, which posted a surplus of ¥167.5 B, beating the market expectation. The Trade Balance deficit shrank from ¥-556.8 B to ¥-77.3 B in June, while the Eco Watchers Survey missed expectations, with the Outlook down to 36 from 44 in the previous month. Japan will unveil July Money Supply early Wednesday.

USD/JPY short-term technical outlook

The USD/JPY pair pressures the mentioned daily high as Asian trades come to play, turning bullish in the short-term. The 4-hour chart shows that it rallied beyond its 20 and 100 SMA, with the shortest about to cross above the larger ones. The pair is challenging its 200 SMA for the first time in over a month. Technical indicators, in the meantime, have partially lost their bullish strength, but remain well into positive levels.

Support levels: 106.10 105.70 105.25

Resistance levels: 107.00 107.45 107.90

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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