USD/JPY Forecast: Ranging amid better market’s mood

Valeria Bednarik FXStreet

USD/JPY Current price: 103.80

Optimism persists amid hopes for more stimulus in the US.
Biden’s inauguration takes centre stage, political turmoil may affect markets.
USD/JPY is neutral in the near-term, needs to regain 104.40 to turn bullish.

The market mood improves, and the market’s attention diverges from USD/JPY. The pair is stuck around 103.80, trading alongside US Treasury yields, which hover around Friday’s close. The yield on the benchmark 10-year note currently stands at 1.09%. European indexes, in the meantime, hold within positive levels, but lack follow-through.

The latest optimism comes from the US and Joe Biden’s inauguration, to take place later today. He nominated Janet Yellen as Treasury Secretary, who spoke yesterday pledging to boost stimulus. Biden is expected to sign multiple executive orders today, to reverse some of Trump’s decisions. Also, political turmoil may take its toll on financial markets. Otherwise, the macroeconomic calendar has little to offer.

USD/JPY short-term technical outlook

The USD/JPY pair is comfortable consolidating within Fibonacci levels, neutral in the near-term but bearish in the long run. The 4-hour chart shows that moving averages remain directionless and confined to a tight 30 pips’ range, with the pair at the upper end of it. Technical indicators are flat around their midlines. A long-term descendant trend line in the 104.30 price zone provides critical resistance, and the pair would need to firmly advance beyond 104.40 to turn bullish.

Support levels: 103.50 103.15 102.70

Resistance levels: 104.05 104.40 104.80

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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