USD/JPY turns flat, upside remains capped at 104.00 handle

Haresh Menghani FXStreet

The USD/JPY pair continued with its struggle to move back above 104.00 handle and has now erased early tepid gains to currently trade absolutely flat around 103.85 region.

Despite of broad based greenback strength, with the overall US Dollar Index now scaling to the highest level in more than eight months, the pair has failed to attract any fresh buying interest amid prevalent cautious sentiment around Asian equity markets, which is underpinning the Japanese Yen's safe-haven demand.

The Japanese currency is also benefitting from today's release of better-than-expected trade balance data and manufacturing PMI from Japan, and contributed towards restricting further up-move for the major.

Next in focus would be speeches from couple of FOMC members, William Dudley and James Bullard, later during NA session and would be looked upon to gauge timing of the next Fed rate-hike action and might provide fresh impetus for the pair.

Technical levels to watch

A follow through selling pressure below 103.75-70 immediate support is likely to drag the pair immediately towards 103.35 intermediate support before the pair eventually drops towards retesting 100-day SMA support near 103.00 round figure mark.

On the upside, sustained bullish momentum above 104.00 handle, leading to a subsequent break above 104.20 (Friday's high), is likely to lift the pair immediately towards 104.50-60 strong resistance area.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 103.42

40% Bullish
40% Bearish
20% Sideways

Bias Neutral

1 Month

Avg Forecast 103.97

60% Bullish
33% Bearish
7% Sideways

Bias Bullish

1 Quarter

Avg Forecast 104.67

42% Bullish
32% Bearish
26% Sideways

Bias Bullish

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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