USD/JPY Forecast: Yen favored on a risk-averse environment

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.51

The Japanese services sector improved in June but remains in contraction territory.
A holiday in the US limited movements around the sentiment-dependent pair.
USD/JPY lifeless around the 38.2% retracement of its latest daily slide.

After reaching a three-week high of 108.16 mid-week, the USD/JPY pair ended it with modest gains around 107.50. On Friday, the pair was confined to a tight 20 pips’ range, clearly reflecting the pair’s dependence on the market’s sentiment. With US markets closed amid a local holiday, the pair was unable to attract investors. By the end of the week, Asian shares managed to post some gains, although European indexes closed in the red.

Japan published the June Jibun Bank Services PMI, which recovered from 26.5 to 45, the first encouraging sign in these chaotic months. The country won’t publish any data this Monday.

USD/JPY short-term technical outlook

The daily chart for the USD/JPY pair offers a neutral-to-bearish stance, stuck around the 38.2% retracement of its latest daily decline. In the mentioned time-frame, the pair is a handful of pips above a bearish 20 SMA while below the larger ones, as technical indicators remain flat around their midlines. In the 4-hour chart, the picture is the same, as technical indicators head nowhere within neutral levels as the pair holds between directionless moving averages.

Support levels: 107.20 106.95 106.60

Resistance levels: 107.95 108.30 108.65

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.

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