USD/JPY Forecast: Weighed by falling US Treasury yields

Valeria Bednarik FXStreet

USD/JPY Current price: 109.44

US Treasury yields remain under selling pressure and reached fresh one-month lows.
Japanese data was mostly encouraging, but the focus remains on US inflation.
USD/JPY is neutral-to-bearish in the near-term, key support at 108.90.

Major pairs continue to trade uneventfully as investors await first-tier data. The USD/JPY pair hovers around 109.40, confined to a tight 20 pips range ever since the day started. The dollar is under pressure as US Treasury yields continue to fall. That on the 10-year note is currently at 1.51%, its lowest in a month. Meanwhile, equities are also in the red, indicating a tepid market’s mood.

Earlier in the day, Japan published May Machine Tool Orders, which rose a whopping 140.7% YoY, and Money Supply for the same month which was up by 7.9% YoY. The US session will bring minor figures, as the country will publish MBA Mortgage Approvals for the week ended June 4 and April Wholesales Inventories.

USD/JPY short-term technical outlook

The USD/JPY pair is neutral-to-bearish in the near-term. The 4-hour chart shows that a flat 100 SMA keeps providing support while a bearish 20 SMA caps the upside. Technical indicators head nowhere around their midlines, indicating absent speculative interest. The main support level is 108.90, with bears taking over on a break below the level.

Support levels: 109.20 108.90 108.50

Resistance levels: 109.60 110.10 110.45

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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