USD/JPY Forecast: Consolidating losses near April low

USD/JPY Current price: 108.92

• Japan’s Machinery Orders unexpectedly fell in February, down 7.1% YoY.
• US Federal Reserve chief Powell will offer a speech in the American afternoon.
• USD/JPY at risk of falling further due to weaker US Treasury yields.

The USD/JPY pair consolidates losses near a fresh April low at 108.74, trading below the 109.00 figure. The dollar remains under selling pressure amid weaker Treasury yields, and mixed equities, with most Asian indexes down and European ones ticking higher.  

Japanese data was discouraging, exacerbating the dismal mood. February Machinery Orders were down by 8.5% MoM and fell 7.1% YoY, much worse than the expected advances. Also, Bank of Japan Governor Haruhiko Kuroda offered a speech, but he repeated his usual stance of maintaining an ultra-loose policy to achieve the 2% inflation target. The US macroeconomic calendar includes a speech from the Federal Reserve chief, Jerome Powell, although no surprises are expected from that side.

USD/JPY short-term technical outlook

The USD/JPY pair could extend its decline, according to intraday technical readings. The 4-hour chart shows that the price is struggling around its 200 SMA, after breaking below the shorter ones earlier in the week. The 20 SMA heads firmly lower below the 100 SMA, indicating increased selling interest. Meanwhile, technical indicators remain within negative levels, without clear directional strength.

Support levels: 108.65 108.30 108.00

Resistance levels: 109.20 109.60 110.00

View Live Chart for the USD/JPY