- USD/JPY found a decent support near 100-hour SMA and stalled the overnight retracement slide.
- The technical set-up favours bullish traders and supports prospects for additional near-term gains.
- Dips might be seen as a buying opportunity and remain limited near 110.00, or weekly swing lows.
The USD/JPY pair extended its sideways consolidative price action heading into the North American session and remained confined in a narrow trading band, just below mid-110.00s.
A combination of diverging forces failed to provide any meaningful impetus to the USD/JPY pair and led to a subdued/range-bound price action on Thursday. The underlying bullish sentiment around the equity markets, despite persistent COVID-19 woes, undermined the safe-haven Japanese yen.
That said, the repricing of the likely timing for policy tightening by the Fed, along with a softer tone around the US Treasury bond yields held the US dollar bulls from placing aggressive bets. This, in turn, was seen as a key factor that capped the upside for the USD/JPY pair.
From a technical perspective, the USD/JPY pair attracted some buying near 100-hour SMA and for now, seems to have stalled the overnight retracement slide from over one month tops. However, the lack of any follow-through buying warrants some caution before positioning for any further gains.
Meanwhile, oscillators on 4-hour/daily charts are holding comfortably in the positive territory and favour bullish traders. Hence, any subsequent decline might be seen as a buying opportunity near the 110.25-20 region and remain limited near the key 110.00 psychological mark.
A convincing break below will negate the positive outlook and prompt some aggressive technical selling. The USD/JPY pair might then accelerate the corrective slide towards the next relevant support near the 109.65-60 region before eventually dropping to the 109.00 round figure.
On the flip side, sustained strength beyond the 110.50-55 region could push the USD/JPY pair back towards the overnight swing highs, around the 110.80 region. This is closely followed by the 111.00 mark, above which bulls might aim to challenge YTD tops, around the 111.65 region.
USD/JPY 1-hour chart
-637643675944802288.png)
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.