- The USD/JPY ended the week on the right foot, gaining 1.42%.
- High US Treasury yields underpinned the USD/JPY pair.
- USD/JPY Price Forecast: The pair is upward biased, but it might correct courtesy of RSI showing overbought conditions.
The USD/JPY is set to finish the week above the 124.00 mark for the first time in the year, though short of the YTD high at 125.10, amid a mixed market mood and upward pressured US Treasury yields. At the time of writing, the USD/JPY is trading at 124.27
US equities closed mixed, portraying the market sentiment. US Treasury yields rose, led by the 10-year benchmark note rate up to four and a half basis points, sat at 2.706%, a tailwind for the USD/JPY due to its positive correlation. If yields rise, the USD/JPY pair does it too.
On Friday, the USD/JPY opened around 123.90 but then fell towards the mid-pòint between the S1-Daily pivot point at 123.67, a price level where bulls took charge and lifted the pair towards fresh weekly highs at 124.67.
USD/JPY Price Forecast: Technical outlook
The USD/JPY remains upward biased. The daily moving averages (DMAs) reside well below the spot price, confirming the uptrend. However, the Relative Strenght Index (RSI) at 76.15 is aiming higher and at overbought levels, which means that the pair might be headed towards a correction before resuming up.
If the scenario of a lower correction plays out, the USD/JPY’s first support would be 124.00. A decisive break would expose 123.67. Once cleared, the next support would be March 244 daily high at 122.41.
Upwards, the USD/JPY’s first resistance will be 125.00, which once breached would send the pair towards the YTD high at 125.10, followed by June 2015 cycle highs near 125.85, and then the April 2001 swing high around 126.85.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.