USD/JPY Forecast: Waiting for US data, bearish

Valeria Bednarik FXStreet

USD/JPY Current price: 105.20

A light of hope related to US fiscal stimulus keeps equities afloat.
The US will publish September Retail Sales and October Consumer Confidence.
USD/JPY is consolidating at the lower end of its weekly range.

The USD/JPY pair is trading lower in range around 105.20, as demand for the greenback has somehow receded. However, the American currency is up weekly basis against most major rivals, as concerns related to a US fiscal stimulus package and Brexit persist. Meanwhile, equities trade with a better tone, with European indexes posting modest intraday gains. Comments from US Senator McConnell on Thursday were a light of hope for markets, as he said that a fiscal stimulus package would be passed after the elections if a deal can’t be agreed these days.

The macroeconomic calendar was quite scarce during Asian trading hours, without releases in Japan. The focus in on US Retail Sales, foreseen up 0.7% in September, and the preliminary estimate of the Michigan Consumer Sentiment Index for October, expected at 80.5 from 80.4 in September.

USD/JPY short-term technical outlook

The USD/JPY pair is at risk of extending its decline in the near-term but needs to clear the 105.00 support level. The 4-hour chart shows that the pair continues to trade below all of its moving averages, with the 20 SMA slowly grinding lower. Technical indicators in the mentioned time-frame remain within negative levels, although with limited bearish momentum.

Support levels: 105.00 104.65 104.20

Resistance levels: 105.40 105.80 106.25

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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