USD/JPY Forecast: Rally continues amid appetite for the greenback

Valeria Bednarik FXStreet

USD/JPY Current price: 105.46

The Japanese economy is showing signs of a turnaround, according to BOJ’s Kuroda.
US Treasury yields remained mute amid growth concerns and coronavirus vaccine’s hopes.
USD/JPY holding on to gains and could rally up to 106.26 during the upcoming sessions.

The USD/JPY has advanced for a third consecutive day, reaching a weekly high of 105.48. As it has been happening since the week started, is all about demand for the greenback. The pair held on to gains by the end of the day, despite the sour tone of Wall Street. US Treasury yields, in the meantime, remained within familiar levels, trapped between concerns about economic growth and optimism related to a coronavirus vaccine, as Johnson & Johnson became the fourth company to start a phase three testing.

In the data front, Japan published at the beginning of the day the preliminary September Jibun Bank Manufacturing PMI, which came in at 47.3 as expected, improving modestly from 47.2 in August. The country also published the July All Industry Activity Index, which was up 1.3%, missing expectations of 3.3%. Also, BOJ’s Kuroda offered a speech and said that the local economy is showing signs of a turnaround, adding that the central bank may extend the deadline for aid to pandemic-hit firms. During the upcoming Asian session, the BOJ will release the Minutes of its latest meeting.

USD/JPY short-term technical outlook

The USD/JPY pair has extended its rally to reach the 61.8% retracement of its latest daily decline around 105.40. The 4-hour chart shows that the pair further advanced above a now bullish 20 SMA, while the larger ones have lost their bearish strength, standing above the current level. Technical indicators, in the meantime, reached overbought readings, retreating just modestly ahead of the close. The rally will likely continue on a break above the mentioned daily high.

Support levels: 104.85 104.50 104.00

Resistance levels: 105.60 105.95 106.25

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: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD softens to near 1.3600 as BoE hints further rate cuts

The GBP/USD pair loses ground to near 1.3610 during the early Asian session on Monday. The Pound Sterling softens against the Greenback amid growing expectations of the Bank of England’s interest-rate cut. Traders will take more cues from the Fedspeak later on Monday.

Gold eyes acceptance above $5,000, kicking off a big week

Gold is consolidating the latest uptick at around the $5,000 mark, with buyers gathering pace for a sustained uptrend as a critical week kicks off. All eyes remain on the delayed Nonfarm Payrolls and Consumer Price Index data from the United States due on Wednesday and Friday, respectively.

Top Crypto Gainers: Aster, Decred, and Kaspa rise as selling pressure wanes

Altcoins such as Aster, Decred, and Kaspa are leading the broader cryptocurrency market recovery over the last 24 hours, as Bitcoin holds above $70,000 on Monday, up from the $60,000 dip on Thursday.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.