USD/JPY Daily Forecast – Test Of Support At 104.20USD/JPY gained strong downside momentum and is trying to settle below the nearest support at 104.20.
USD/JPY Video 21.09.20.
Yen Continues To Gain Ground Against U.S. Dollar
USD/JPY is currently trying to settle below the support level at 104.20 as the yen continues to show significant strength.
Thanks to the negative inflation in Japan, the yen found itself in a position when it is attractive from a real yield point of view. The real yield advantage in combination with the traditional safe haven status provided significant support to yen in recent trading sessions.
Meanwhile, the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has once again failed to settle below the nearest support level at 92.80 and rebounded closer to the 93 level. The rebound of the U.S. dollar may provide some support to USD/JPY.
There are no important economic reports scheduled to be released in U.S. and Japan today so USD/JPY will remain in the hands of general market sentiment. In the near term, the yen’s upside move will be tested by the upcoming Flash PMI reports which are scheduled to be published on Wednesday.
USD/JPY gained strong downside momentum and is trying to get below the support level at 104.20.
If USD/JPY manages to settle below this support level, it will head towards the next support at 103.50. RSI has entered the oversold territory but USD/JPY is not extremely oversold so there is some room to gain more downside momentum in case the right catalysts emerge.
In case USD/JPY gets below the support level at 103.50, it will move towards the next support at 103.10.
On the upside, the nearest material resistance level for USD/JPY is located at 104.70. If USD/JPY manages to get above this resistance, it will head towards the next resistance at 105.30.
Back in March, USD/JPY reached a low of 101.18 but quickly rebounded back above 105.00. This time, USD/JPY is not as volatile as in March but traders will still keep a close eye on their charts due to the possibility of a strong rebound.
For a look at all of today’s economic events, check out our economic calendar.