USD/JPY Forecast: Underpinned by a better market’s mood

Valeria Bednarik FXStreet

USD/JPY Current price: 110.11

US Treasury yields extend their recoveries after bottoming at multi-month lows.
Japan’s trade data showed soaring exports and imports in June.
USD/JPY could accelerate its advance once above 110.45.

The USD/JPY pair regained the 110.00 mark as financial markets maintain the positive tone from Tuesday. The greenback is the strongest, consolidating gains against high-yielding rivals and advancing against safe-haven ones. Government bond yields advance, reflecting cooling demand for safety. The yield on the 10-year US Treasury yields stands at 1.24% after bottoming at 1.12% this week.

Japan published the June Merchandise Trade Balance Total, which posted a surplus of ¥383.2 billion, missing expectations. However, exports were up 48.6% while imports increased by 32.7%. much better than anticipated. The US macroeconomic calendar includes just the MBA Mortgage Applications for the week ended July 16.

USD/JPY short-term technical outlook

The USD/JPY pair trades near a daily high of 110.17. The near-term picture is neutral-to-bullish, as the pair is finding support on a flat 20 SMA at around 109.80 but remains below also directionless 100 and 200 SMAs. Technical indicators entered positive territory but lack momentum. The pair would need to break above 110.45 to sustain the bullish potential and recover towards the 111.00 region.

Support levels: 109.80 109.40 109.05

Resistance levels: 110.45 110.90 111.25

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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