USD/JPY Forecast: Dollar’s demand continues, 107.00 at sight

Valeria Bednarik FXStreet

USD/JPY Current price: 106.71

Stimulus hopes mount as US President Biden’s stimulus bill passes the House.
US Treasury yields are in recovery mode and still leading the way.
USD/JPY firmly bullish in the near-term, immediate resistance at 106.95.

The USD/JPY pair trades at fresh 2021 highs in the 106.70 price zone as market players continue to buy the greenback. Weekend news spurred some risk-appetite at the beginning of the day, as the focus shifted to the US fiscal aid. The House of Representatives passed President Joe Biden’s $1.9 trillion stimulus bill, which has now moved to the Senate. Democrats hope to pass it before March 14, when the previous stimulus expires.

Lower US Treasury yields put some pressure on the greenback, although the American currency resumed its advance with London’s opening. European indexes are sharply higher despite Asian losses, while US government bond yields trimmed early losses.

Japan published the February Jibun Bank Manufacturing PMI, which printed at 51.4 from 50.6 in the previous month. The US session will include the final reading of the February Markit Manufacturing PMI and the official ISM manufacturing index, the latter foreseen at 58.8 from 58.7 previously.

USD/JPY short-term technical outlook

The USD/JPY pair is trading un the 106.70 area, pressuring intraday highs and poised to extend its advance. In the 4-hour chart, the pair keeps advancing above all of its moving averages. The 20 SMA is firmly up, above the 100 SMA and about to cross the 200 SMA, reflecting the strong near-term buying interest. The Momentum indicator heads firmly higher, despite developing within overbought levels, while the RSI is partially losing its bullish strength just below the 70 mark. Further gains are to be expected on a break above 106.95, the immediate resistance level.

Support levels: 106.20 105.75 105.30

Resistance levels: 106.95 107.30 107.65

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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