USD/JPY Forecast: Pressuring weekly highs amid prevalent dollar’s demand

Valeria Bednarik FXStreet

USD/JPY Current price: 106.36

US Treasury yields tick higher, providing support to USD/JPY.
The focus shifts to US employment-related data ahead of the NFP report.
USD/JPY is bullish in the short-term, next relevant resistance level at 106.70.

The USD/JPY pair is showing little signs of life this Thursday, confined to a tight 30 pips range ever since the day started. However, it is trading at fresh weekly highs around the 106.35 as the greenback retains its strength. The modest advance could be attributed to similar behavior in US Treasury yields, which are modestly up in pre-opening trading. Equities, on the other hand, retain their bullish bias, but that does not seem enough to underpin USD/JPY.

Japan published at the beginning of the day the Jibun Bank Services PMI, which printed at 45 in August, below the previous 45.4. The focus now shifts to US employment-related data, ahead of the Nonfarm Payroll report to be out on Friday. The country will release August Challenger Job Cuts and Q2 Unit Labor Costs. It will also publish Initial Jobless Claims for the week ended August 28, foreseen at 950K from 1006K in the previous week.

USD/JPY short-term technical outlook

The USD/JPY pair continues to grind higher and seems poised to extend its advance. The 4-hour chart shows that it has held above all of its moving averages, while the 20 SMA finally turned higher, and is about to cross above the larger ones. The medias, however, remain in a tight 10 pips’ range. Technical indicators, in the meantime, advance within positive levels, reflecting increasing buying interest.

Support levels: 105.90 105.50 105.10

Resistance levels: 106.70 107.10 107.40

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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