Market Overview

USD/JPY Forecast: Falls For The Second Day In A Row And Tests Support At 108.45

USD/JPY Forecast: Falls For The Second Day In A Row And Tests Support At 108.45
  • USD/JPY falls for the second day in a row and tests support at 108.45.
  • The short-term technical picture turns from neutral to slightly bearish.

The USD/JPY pair continued to fall on Tuesday, posting its second daily loss in a row, as the lack of progress in trade negotiations between China and the United States continued to take its toll on the greenback and lifted demand for safe-havens.

During Wednesday’s Asian session Japan will release trade balance figures while the Federal Reserve will publish the minutes of its latest meeting later in the day.

USD/JPY Short-Term Technical Outlook

The USD/JPY pair consolidates below the 20- and the 200-day SMAs, having hit a daily low of 108.45. The technical picture has turned slightly bearish according to the 4-hour chart, with indicators crossing into negative ground although lacking bearish strength. Immediate support is seen at 108.44, 200-period SMA in 4-hour chart, followed by 108.23, last week’s low. However, only a break below 107.70, 100-day SMA, could tilt the longer-term bias to the downside. On the other hand, critical resistance is seen at 109.00. A break above this level could shift the short-term focus to the upside and send USD/JPY to the 109.50 zone, en-route to a more significant area of 109.70-90, where the 100- and 200-week SMA offer strong resistance.

Image Sourced from Pixabay


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