USD/JPY Forecast: Corrective decline underway, next movements depending on yields’ behaviour
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CLAIM OFFERUSD/JPY Current price: 105.22
- US Treasury yields reached their highest since March 2020 before changing course.
- Japanese trade surplus improved to ¥965.1 billion in December from ¥616.1 billion.
- USD/JPY pair is trading at daily lows and could extend the decline in the next sessions.
The USD/JPY pair retreated from a daily high of 105.66, trading in the red for most of the American session to finish the day near a daily low at 105.14. US Treasury yields finished the day with modest losses, but the yield on the 10-year note hit 1.20%, while that of the 30-year note briefly topped 2%, their highest since March 2020.
Japan published mixed figures, as the December Trade Balance surplus resulted in ¥965.1 billion, much better than the previous ¥616.1 billion. The January Eco Watchers Survey for the current situation printed at 51.2, while the outlook came in at 39.9, this last, missing the market’s expectations. Japan will publish December Labor Cash Earnings and January Money Supply this Tuesday.
USD/JPY short-term technical outlook
The USD/JPY pair could extend its decline in the next few sessions, particularly if it extends its decline below the mentioned daily low. In the 4-hour chart, the pair has broken below its 20 SMA, which has turned flat, while technical indicators entered negative territory, although with limited bearish strength. The corrective decline will likely gain momentum on a break below the next support level at 104.85.
Support levels: 105.15 104.85 104.40
Resistance levels: 105.75 106.10 106.45
USD/JPY Current price: 105.22
- US Treasury yields reached their highest since March 2020 before changing course.
- Japanese trade surplus improved to ¥965.1 billion in December from ¥616.1 billion.
- USD/JPY pair is trading at daily lows and could extend the decline in the next sessions.
The USD/JPY pair retreated from a daily high of 105.66, trading in the red for most of the American session to finish the day near a daily low at 105.14. US Treasury yields finished the day with modest losses, but the yield on the 10-year note hit 1.20%, while that of the 30-year note briefly topped 2%, their highest since March 2020.
Japan published mixed figures, as the December Trade Balance surplus resulted in ¥965.1 billion, much better than the previous ¥616.1 billion. The January Eco Watchers Survey for the current situation printed at 51.2, while the outlook came in at 39.9, this last, missing the market’s expectations. Japan will publish December Labor Cash Earnings and January Money Supply this Tuesday.
USD/JPY short-term technical outlook
The USD/JPY pair could extend its decline in the next few sessions, particularly if it extends its decline below the mentioned daily low. In the 4-hour chart, the pair has broken below its 20 SMA, which has turned flat, while technical indicators entered negative territory, although with limited bearish strength. The corrective decline will likely gain momentum on a break below the next support level at 104.85.
Support levels: 105.15 104.85 104.40
Resistance levels: 105.75 106.10 106.45
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