USD/JPY Forecast: Range persists amid prevalent risk-off mood

Valeria Bednarik FXStreet

USD/JPY Current Price: 107.76

US Treasury yields declined to their lowest since last May.
Japan’s April Jibun Bank Manufacturing PMI to be out this Wednesday, previously at 44.8.
USD/JPY continues to trade within limited intraday ranges around the 107.70 level.

The USD/JPY pair edged lower during Asian trading hours, although later recovered from a daily low of 107.27, to settle within familiar levels around the 107.70 level. Risk aversion kept demand for both currencies evenly balanced for most of the day, although the greenback has had a slight advantage against its Asian counterpart since the beginning of the pandemic crisis.

Global equities edged lower and closed in the red, while US Treasury yields fell to their lowest since last March. The yield on the benchmark 10-year note touched an intraday low of 0.54% to finish the day at 0.57%. Japan didn’t release relevant data this Tuesday, although during the upcoming session the country will unveil the preliminary estimate of the April Jibun Bank Manufacturing PMI, previously at 44.8. The country will also publish the final version of the February Leading Economic Index, foreseen unchanged at 92.1.

USD/JPY short-term technical outlook

The USD/JPY pair maintains its neutral short-term technical stance. The 4-hour chart shows that it’s trading around congesting moving averages, which remain confined to a tight range and directionless. Technical indicators hover around their midlines without clear directional strength. The downside seems limited amid resurgent demand for the greenback in the case risk sentiment deteriorates.

Support levels: 107.30 106.95 106.50

Resistance levels: 108.10 108.50 108.80

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.

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