USD/JPY Forecast: Next level to challenge is 108.16

Valeria Bednarik FXStreet

USD/JPY Current price: 107.81

Soaring US Treasury yields pushed USD/JPY to its highest since last July.
Japan’s Consumer Confidence Index improved from 29.6 to 33.8 in February.
USD/JPY is extremely overbought, but without signs of changing course.

The USD/JPY pair conquered the 107.00 level during Asian trading hours, soaring to 107.89 mid-US session. The catalyst was the Federal Reserve head, Jerome Powell, who repeated ad exhaustion that a rake hike is directly linked to progress towards the central bank goals and inflation, which may take a long time to achieve given the pandemic. US Treasury yields soared afterwards, reaching levels that were last seen in February 2020. The yield on the benchmark 10-year Treasury note hit 1.547%, to later stabilize around 1.53%. Stocks plummeted, with US indexes closing deep in the red.

Japan published at the beginning of the day the February Consumer Confidence Index, which improved from 29.6 to 33.8. Early on Friday, the country will release February Foreign Reserves, although little action is expected coming from the data front until later in the day when the US will publish February employment data.

USD/JPY short-term technical outlook

The USD/JPY pair keeps approaching 108.00 ahead of the Asian opening, with an immediate resistance/target at 108.16, July 2020 monthly high. The pair is overbought in the near-term but without signs of giving up. In the 4-hour chart, technical indicators remain at extreme levels, barely losing their bullish strength. The same chart shows that the 20 SMA heads north around 107.00, while the longer ones are accelerating higher below it. The pair could continue advancing despite the extreme conditions.

Support levels: 107.30 106.95 106.60

Resistance levels: 108.15 108.40 108.75

View Live Chart for the USD/JPY

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.