USD/JPY Forecast: Recovery continues despite limited momentum
|USD/JPY Current Price: 107.92
- Japan Tankan Large Manufacturing Index foreseen in Q2 at -31 from -8 in the previous quarter.
- Comments from Federal Reserve’s Powell played against safe-haven currencies.
- USD/JPY trades near 108.00 could extend its advance in the upcoming sessions.
The USD/JPY pair reached a fresh 3-week high of 107.97, ending the day not far below the level. A better market mood after cautiously optimistic comments from US Fed’s Powell and the positive tone of equities underpinned the pair, although gains were limited by absent dollar’s demand. US Treasury yields, in the meantime, posted modest intraday advances, with the yield of the 10-year note up to 0.66%.
Japan published the May Unemployment Rate, which surged to 2.9%, while Industrial Production in the same month plunged 8.4% MoM and fell 25.9% when compared to a year earlier. Housing Starts, however, were down 12.3% vs. -15.9% expected. The country will publish the June Consumer Confidence Index this Wednesday, foreseen at 20.9 from 24 in the previous month. It will also publish the Tankan Large Manufacturing Index, seen in Q2 at -31 from -8 in the previous quarter.
USD/JPY short-term technical outlook
The USD/JPY pair has reached the 50% retracement of its June decline, pressuring the level ahead of the Asian opening. In the short-term, the risk is skewed to the upside, although the momentum is still limited. In the 4-hour chart, the pair has spent the day above all of its moving averages, with the 20 SMA advancing above the 100 SMA. Technical indicators, in the meantime, remain near their daily highs, although without directional strength.
Support levels: 107.50 107.10 106.70
Resistance levels: 107.95 108.30 108.65
View Live Chart for the USD/JPY
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.