USD/JPY Forecast: Waiting for clues from yields

Valeria Bednarik FXStreet

USD/JPY Current price: 106.28

A holiday in the US kept the USD/JPY pair confined to a tight range.
Japan’s GDP expected to be downwardly revised in Q2 TO -8.1% from -7.8%.
USD/JPY is trading above 106.00, but there are no signs of upcoming advance.

The USD/JPY pair spent the day hovering around 106.20, ending the day with modest gains. Without activity around US government bond yields, the pair was unable to move. Data coming from Japan was mixed, as the country published the preliminary estimate of July Leading Economic Index, which improved to 86.9, better than the 84.6 expected. The Coincident Index for the same period, however, came in at 76.2, missing expectations of 79.

The macroeconomic calendar in Japan will be quite busy this Tuesday, as the country will publish the July Current Account, and the final reading of Q2 GDP, foreseen at -8.1% from a previous estimate of -7.8%. The country will also unveil the preliminary estimate of August Machine Tool Orders previously at -31.1%. Finally, the country will release the August Eco Watchers Survey on the current situation, foreseen at 33.3 from 41.1 in the previous month.

USD/JPY short-term technical outlook

The short-term picture for the USD/JPY pair is neutral, as the pair has been confined to a tight intraday range for the third consecutive journey. In the 4-hour chart, the pair is resting above its 20 SMA, which lost strength upward but holds above the larger ones. Technical indicators, in the meantime, head nowhere around their midlines. The pair needs to advance beyond 106.70 to have chances of extending its advance during the upcoming sessions.

Support levels: 105.90 105.50 105.10

Resistance levels: 106.35 106.70 107.10

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.

GBP/USD keeps the bid bias near 1.3550

GBP/USD leaves behind part of the recent three-day retracement and hovers around the 1.3550 region on Monday. The Greenback’s fresh downward trend helps Cable and the rest of the risk complex recoup part of the recent ground lost while attention remains on the potential Fed rate path.

EUR/USD struggles near 1.1600; looks to Eurozone HICP for some impetus

The EUR/USD pair struggles to capitalize on the overnight bounce from the 100-day SMA, near the 1.1575-1.1580 region, or a one-and-a-half-week low, and drifts lower during the Asian session on Tuesday. Spot prices currently trade around the 1.1600 mark, down nearly 0.10% for the day, amid modest US Dollar strength as traders now look to the preliminary reading of the Eurozone Harmonized Index of Consumer Prices (HICP).

Gold: Defending $4,400 is critical for buyers

Gold fades Monday’s rebound from eight-day lows, reverting toward $4,400 early Tuesday. US Dollar bounces sharply amid US-Iran tensions-led risk aversion and hawkish Fed bets. Gold attacks 21-day SMA near $4,400 after defending it on Monday; RSI still bullish.

Bitcoin shows resilience at $78,000 – Arbitrum, Curve DAO rally

The broader cryptocurrency market sustains its risk-on sentiment, with Bitcoin (BTC) showing resilience near $78,000 on Tuesday. Arbitrum (ARB) records double-digit gains over the last 24 hours as the Robinhood app, built on Arbitrum Orbit, hits a record high in revenue collection, while Curve DAO (CRV) follows suit. Bitcoin trades at $78,415 at press time on Tuesday, holding a clear bullish bias.

Fed Chair Warsh runs open-mouth operations at Jackson Hole but can he deliver?

Federal Reserve Chairman Kevin Warsh moved markets on Friday with his Jackson Hole speech, even though the central bank has yet to do anything to move inflation. Clearly, Warsh wants to convey a message. He’s tough on inflation, and the Fed will “deliver price stability.”

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.