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USD/JPY Forecast: Could Enter A Bearish Corrective Phase On A Break Below 109.70

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USD/JPY Forecast: Could Enter A Bearish Corrective Phase On A Break Below 109.70

USD/JPY Current Price: 109.88

  • Japan’s December Merchandise Trade Balance, seen at ¥-150B, worse than the previous ¥-82.1B.
  • Worldwide equities closed mixed, as sentiment improved, but not enough.
  • USD/JPY could enter a bearish corrective phase on a break below 109.70.

The USD/JPY pair tried to recover the 110.00 threshold but failed, ending the day as it started it in the 109.80 price zone. A better market mood during the Asian session helped the pair to recover up to 110.09. However, the sentiment deteriorated during European trading hours, with local indexes posting modest intraday losses. Wall Street, on the other hand, posted a modest intraday advance, while Treasury yields finished the day pretty much unchanged.

Early Thursday, Japan will release the December Merchandise Trade Balance, seen at ¥-150B, worse than the previous ¥-82.1B. Imports and exports are seen decreasing yearly basis but improving from the previous reading. The country will also publish the All Industry Activity Index, seen at -0.1% in November, and the final version of the November Leading Index expected unchanged at 90.9.

USD/JPY Short-Term Technical Outlook

The USD/JPY pair is technically bearish, although its bearish potential remains limited as long as the pair holds above 109.70 a strong static support level. In the 4-hour chart, a bearish 20 SMA provided intraday resistance, while the larger moving averages lack directional strength well below the current level. The Momentum indicator heads marginally lower within negative level while the RSI hovers around 44, lacking enough strength to confirm a downward move.

Image Sourced from Pixabay

Posted-In: FXStreet USD/JPYNews Forex Global Markets General

 

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