- USD/JPY remained positive for the week, rising 1.11%, amid risk-off sentiment and supported by the US 10-year yield.
- USD/JPY Price Forecast: The bias is to the upside, but the RSI inside the overbought area might suggest caution is warranted.
The USD/JPY advances in the American session amid an environment of risk aversion in the market, courtesy of the Fed speech, the continuation of the Russo-Ukrainian war and the Chinese economy about to slow down, as reported by the PMIs of manufacturing and services, which were below expansion levels. At time of writing, USD/JPY is trading at 123.87.
US equities continue to trade in the red, with losses between 0.86% and 2.66%. Meanwhile, the dollar remains buoyant, as shown by the US Dollar Index, a measure of the dollar’s value against its peers, up 0.25% to 99.742, supported by the US Treasury yield. 10-year up to six basis points, currently at 2.622%.
Overnight USD/JPY hovered around the 123.50-124.00 range ahead of the March FOMC meeting release. Once revealed, the USD/JPY fell towards the daily lows of 123.46, but recovered some ground and heads towards the 124.00 mark.
USD/JPY Price Forecast: Technical Outlook
USD/JPY is biased to the upside. The daily moving averages (DMAs) are well below the spot price and confirm the bias. However, the Relative Strength Index (RSI) at 74.65 is inside the overbought area, which suggests caution is warranted.
With that being said, the first resistance level for USD/JPY would be 124.00. A break of the latter would expose the yearly high at 125.10, followed by the June 2015 high at 125.85, followed by the April 2001 daily high at 126.85, and then the February 2002 high at 135.02.
On the other hand, the first support of the USD/JPY would be 123.00. A decisive break would open the door towards 121.27, but it would find some obstacles on its way to the south. Once it breaks below 123.00, the next support would be 122.41, followed by 122.00 and then the daily low of March 31 at 121.27.
Technical levels
Source: Fx Street
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