USD/JPY Forecast: Under pressure ahead of US employment data

Valeria Bednarik FXStreet

USD/JPY Current Price: 105.57

The poor performance of equities and falling Treasury yields weighed on the pair.
Japan’s June Leading Economic Index is foreseen at 78.8 from 78.4 in the previous month.
USD/JPY offers a bearish bias, needs to break the weekly low at 105.31.

The USD/JPY pair is trading lower in range, heading into the Asian opening trading at around 105.45. The pair was weighed by the poor performance of equities during the first half of the day, and falling Treasury yields, which flirted with their recent lows amid uncertainty about the next US stimulus package. So far, Congress keeps discussing it, with US Republican Senator Shelby saying that the two parties are still far apart on a deal. US President Trump has tweeted that he would proceed with an executive order if lawmakers maintain the deadlock.

Japan will publish this Friday, June Labor Cash Earnings and Overall Household Spending. Later into the day, the country will publish the preliminary estimate of the June Leading Economic Index, foreseen at 78.8 from 78.4 in the previous month. The Coincident Index for the same period is expected unchanged at 73.4.

USD/JPY short-term technical outlook

The USD/JPY pair maintains its bearish bias according to intraday technical readings. The 4-hour chart shows that the 20 SMA is gaining bearish strength above the current level and below the larger ones. Technical indicators in the mentioned time-frame remain within negative levels, the Momentum heading lower and the RSI stable at around 48. The main support is the weekly low at 105.31, with a break below it opening doors for a steeper slide.

Support levels: 105.30 104.90 104.40

Resistance levels: 105.75 106.10 106.50

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 stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.