USD/JPY Forecast: Under mild-pressure, no clear directional strength

Valeria Bednarik FXStreet

USD/JPY Current price: 103.67

US Treasury yields posted a modest intraday advance, limiting USD/JPY slide.
The BOJ’s Minutes showed policymakers would remain vigilant to market moves.
USD/JPY maintains its neutral stance with the risk skewing to the downside.

The USD/JPY pair eased on a better market mood, which weighed on the greenback. The USD/JPY pair trades in the 103.60 price zone, not far from a daily low of 103.55. US Treasury yields posted a modest intraday advance after Janet Yellen was confirmed as US Treasury Secretary, but lacked follow-through.

The Bank of Japan released the minutes of its latest monetary policy meeting, which showed that policymakers remain open to increase facilities, should the pandemic developments require so. A few members said that they must be vigilant to market moves including FX, amid the dollar weakening vs the yen. The country published the December Corporate Service Price Index, which came in at -0.4%, better than anticipated. Japan will publish December Retail Trade figures this Wednesday, and Large Retailer Sales for the same month. The country will also release the November Leading Economic Index, expected at 96.6.

USD/JPY short-term technical outlook

The USD/JPY pair is trading just below the 38.2% retracement of its January rally, hovering around the level since the week started. The 4-hour chart shows that moving averages remain directionless and confined to a tight 10 pips’ range, a clear sign of the absence of directional strength. The Momentum indicator heads lower around its 100 SMA while the RSI indicator is flat at around 46, skewing the risk to the downside.

Support levels: 103.25 102.90 102.50

Resistance levels: 104.05 104.40 104.80

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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