USD/JPY Forecast: Up, but dollar’s demand is limited

Valeria Bednarik FXStreet

USD/JPY Current price: 105.79

A better market mood and equities’ performance underpin the pair.
Fed’s chief Powell is due to testify before a different committee on Wednesday.
USD/JPY has lost its bearish strength, but the bullish momentum is limited.

The USD/JPY pair trades near 105.80, advancing alongside equities. The greenback is generally weak following US Federal Reserve chief Jerome Powell´s testimony before Congress on Tuesday. Equities advanced and the dollar fell after the event, as Powell hinted quantitative easing would stay for long. He also poured cold water on Treasury yields, which have stabilized near their recent highs.

Japan didn’t publish macroeconomic data, while the US calendar will include Powell’s testimony before a different committee, and January New Home Sales, foreseen up by 2.1% MoM.

USD/JPY short-term technical outlook

The USD/JPY pair is trading at daily highs and at risk of extending its advance, despite a limited bullish momentum in the near-term. The 4-hour chart shows that it has advanced above all of its moving averages, with the 20 SMA losing its bearish scope. Technical indicators turned flat after reaching positive levels, lacking directional strength. The bullish case will be stronger if the pair manages to clear the 105.95 resistance area.

Support levels: 105.50 105.20 104.95

Resistance levels: 105.95 106.30 106.65

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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