USD/JPY Forecast: Bears maintain the pressure

Valeria Bednarik FXStreet

USD/JPY Current price: 104.03

The sour tone of equities and falling Treasury yields backed the safe-haven yen.
The Japanese Q4 Tankan Large Manufacturing Index is foreseen at -15 from -27 previously.
USD/JPY is technically bearish but needs to lose the 103.50 level to accelerate its decline.

The USD/JPY pair closed a third consecutive week little changed around the 104.00 level, easing on Friday on the back of the ruling dismal market’s mood. European indexes closed in the red, amid persistent Brexit tensions, while US indexes were mixed, with only the DJIA able to post some modest gains. US Treasury yields fell, providing support to the safe-haven yen, with the yield on the benchmark 10-year note falling to 0.87%, its lowest for this month.

Japan didn’t publish relevant macroeconomic data on Friday but will start the new week by releasing the Q4 Tankan report. The Large Manufacturing Index is foreseen at -15 from -27 in the previous quarter.

USD/JPY short-term technical outlook

The USD/JPY pair is technically bearish, despite the lack of directional progress in the last few weeks. The daily chart shows that it has been unable to recover above a bearish 20 DMA, while the longer ones maintain their downward slopes far above the current level. Technical indicators turned south and currently stand within negative levels. In the shorter-term, and according to the 4-hour chart, the pair is neutral-to-bearish. It is developing below flat moving averages, while technical indicators also lack directional strength. A steeper decline will be clearer on a break below the 103.50 support level.

Support levels: 103.85 103.50 103.10

Resistance levels: 104.30 104.75 105.10

View Live Chart for the USD/JPY

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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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