USD/JPY Forecast: Short-Term Bullish, Room To Recover The 110.00 Level

USD/JPY Current Price: 109.49

• Recovering equities and government bond yields underpinned the pair.
• Market players let aside coronavirus-related concerns, at least for now.
• USD/JPY short-term bullish, room to recover the 110.00 level.

Rallying equities have helped the USD/JPY to advance to a fresh 2-week high of 109.51, holding on to gains by the end of the day. The market put aside concerns about a spreading coronavirus spreading economic disruption, and instead focused in solid US data. American indexes were sharply up, with the DJIA adding near 500 points in the day. Treasury yields also recovered, with the yield on the benchmark 10-year note settling not far from its weekly high of 1.62%.

Japan released at the beginning of the day the Monetary Base, which increased in January by 2.9% YoY, missing the market’s expectations of 3.1%. Early Wednesday, the Japanese macroeconomic calendar will be quite scarce, as the only notable event will a speech from a BOJ’s member. Given the optimistic stance of equities, it seems likely that the pair retains its bullish stance.

USD/JPY Short-Term Technical Outlook

The USD/JPY pair is technically bullish after recovering the 109.00 mark, and as it finishes the US session near daily highs. In the 4-hour chart, the pair met sellers around its 100 SMA, but stands above the 20 and 200 SMA, while technical indicators hold on to daily highs, partially losing their positive momentum amid decreasing volumes.

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