- The overall strength of the US dollar lifts the USD/JPY pair, rising 0.10%.
- Risk aversion maintains the safe haven US dollar offered tone even against the yen.
- USD/JPY Technical Outlook: Bullish bias, as shown by the DMAs under the exchange rate, along with a double bottom chart pattern.
The USD/JPY It advances, recovering from the losses of Monday and Tuesday, and tests the neckline of the “double bottom” pattern seen on the daily chart in the middle of the American session. At the time of writing, the USD/JPY is trading at 115.64.
Market sentiment worsened throughout the day. The Asian session took place at the close on Wall Street on Wednesday, but conditions changed from the European session despite the ongoing talks between Ukraine and Russia in Belarus. Russia’s Deputy Foreign Minister said talks with Ukraine in Belarus could yield results, while Russian Foreign Minister Lavrov said Putin and French President Macron held talks in a phone call. A French official reported that Russia’s Putin told Macron that if Ukraine’s neutralization and disarmament cannot be achieved diplomatically, he would extend Russia’s “special military operations.”
The fall in US Treasury yields is led by US 10-year yields, down 33 basis points to 1.83%, while the dollar marches steadily, with the US dollar index, a gauge of the dollar’s value against a basket of six rivals, rose 0.51% to 97.848.
On Thursday, the US economic docket released US initial jobless claims for the week ending February 26, which came in at 215,000, down from 225,000 estimates, while the services PMI US Markit for February came in at 56.5, one tenth below estimates. At the end of the session, the US ISM Services Index for the same period fell to 56.5, worse than estimates, while Durable Goods Orders and Factory Orders met expectations.
USD/JPY Price Forecast: Technical Outlook
USD/JPY is biased to the upside, as shown by two factors. Firstly, the daily moving averages (DMAs) are below the spot price and secondly, it looks like a double bottom chart pattern is forming. That said, the first resistance level for USD/JPY would be the neckline around 115.78. The break of the latter would expose 116.00, followed by the yearly high at 116.35 and the double bottom target at 117.48.
Additional technical levels
Source: Fx Street
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