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USD/JPY Forecast: Bullish Only Above The Critical 108.90 Resistance Level

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USD/JPY Forecast: Bullish Only Above The Critical 108.90 Resistance Level

USD/JPY Current Price: 108.40

  • Tensions persist, but US data helped riskier assets to recover some ground.
  • Wall Street trimmed most of its intraday losses ahead of the close.
  • USD/JPY bullish only above the critical 108.90 resistance level.

The USD/JPY pair bounced from a daily low of 107.76, to close the day near its daily high of 108.41, as better than expected US data helped the dollar to recover some ground. Also leaning support to the pair, Wall Street trimmed most of its intraday losses, with US indexes mixed at the end of the day. Additionally, US Treasury yields revert their early decline to end the day unchanged from Friday’s closing levels.

No macroeconomic data were coming from Japan at the beginning of the week, and the country will only release minor figures during the upcoming Asian session, December Monetary Base and Vehicle Sales for the same month.

USD/JPY Short-Term Technical Outlook

The USD/JPY pair recovered part of the sharp losses it suffered in the past week, but the advance stalled ahead of the 38.2% retracement of such slump, which indicates that the pair still has chances of resuming its decline. In the 4-hour chart, the 20 SMA has lost its downward strength, with the pair settling a few pips above it, while technical indicators recovered from oversold readings, holding within negative levels with uneven strength. The pair needs to extend its recovery beyond 108.50, the immediate Fibonacci resistance to shrug off its negative stance.

Image by Masashi Wakui from Pixabay

 

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