USD/JPY Forecast: Nearing critical 108.90 support

Valeria Bednarik FXStreet

USD/JPY Current Price: 109.23

Japan’s National core inflation seen ticking marginally higher in November.
Dismal US data and political uncertainty weighed on the USD/JPY.
USD/JPY broke lower, poised to challenge bulls’ determination around 109.00.

Safe-haven assets gained bullish traction mid-US afternoon, resulting in USD/JPY breaking lower. The pair came under selling pressure during US trading hours amid dismal American data, later accelerating its slump, despite Wall Street reaching all-time highs. The USD/JPY pair reached a daily low of 109.17, trading a handful of pips above the level ahead of the Asian opening.

Japan didn’t release macroeconomic figures early Thursday, although, in the next hours, the country will publish November National Inflation. The annual CPI is foreseen at 0.2%, matching its previous reading, while the core CPI is foreseen ticking up to 0.5% from 0.4% previously.

USD/JPY short-term technical outlook

The USD/JPY pair is bearish in the short-term as the 4-hour chart shows that it finally moved away from its 20 SMA, which now gains bearish strength above the current level. Technical indicators have pared their declines, but remain at daily lows. The next relevant support is 108.90, with a break below the level favoring a bearish extension during the last trading day of the week.

Support levels: 108.90 108.60 108.25

Resistance levels: 109.40 109.75 110.00

View Live Chart for the USD/JPY

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD falls toward 1.1700 on broad USD recovery

EUR/USD turns south and declines toward 1.1700 on Wednesday. The US Dollar gathers recovery momentum and forces the pair to stay on the back foor, as traders look to USD short-covering ahead of US inflation report on Thursday. However, the downside could be capped by hawkish ECB expectations.

GBP/USD trades deep in red below 1.3350 after soft UK inflation data

GBP/USD stays under strong selling pressure midweek and trades below 1.3350. The UK annual headline and core CPI rose by 3.2% each, missing estimates of 3.5% and 3.4%, respectively, reaffirming dovish BoE expectations and smashing the Pound Sterling across the board ahead of Thurday's BoE policy announcements.

Gold clings to moderate daily gains above $4,300

Following Tuesday's volatile action, Gold regains its traction on Wednesday and trades in positive territory above $4,300. While the buildup in the USD recovery momentum caps XAU/USD's upside, the cautious market stance helps the pair hold its ground.