Can USD/JPY Make it This Time?22 December, 2017 by Aayush Jindal in Market Analysis
- The US Dollar is once again approaching towards a major resistance near 113.75-114.00.
- On the downside, there is a key bullish trend line forming with support at 113.20 on the 4-hours chart of USD/JPY.
- A break and 4-hour close above 114.00 could open the doors for more upsides.
- The third estimate of the US GDP came in at +3.2%, less than the forecast of +3.3%.
USDJPY Technical Analysis
The US Dollar survived losses below 112.00 a few days ago against the Japanese Yen. The USD/JPY pair is now moving higher towards a crucial barrier around 113.75-114.00.
There was a decent bullish bias formed from the 112.00 swing support and the pair moved above the 113.00 level. The upside move was strong since buyers succeeded in a 4-hour close above the 100 (red) and 200 (green) simple moving averages.
These are positive signs, but we cannot ignore the fact that the pair is now facing an uphill task near the 113.75-114.00 resistance area, which acted as a key hurdle on many occasions.
On the downside, there is a key bullish trend line forming with support at 113.20 on the same chart. The trend line support is also close to the 50% Fib retracement level of the last wave from the 112.83 low to 113.63 high.
Should the pair correct lower from the current levels, it could find bids near 113.20. A break below the stated 113.20 support would negate further gains in USD/JPY and may push the pair back lower.
On the flip side, if the US Dollar buyers succeed in gaining momentum above 114.00, then there can be a rally toward 115.00.
Fundamentally, the US saw the release of the third estimate of the Gross Domestic Product for Q3 2017 by the US Bureau of Economic Analysis. The market was looking for a 3.3% rise (annualized).
However, the actual was below the estimate as the US GDP grew by 3.2%. The US Dollar traded a bit lower after the release. EUR/USD is currently trading nicely above the 1.1800 handle. On the other hand, the GBP/USD pair is struggling to hold the 1.3340 support.
Today, there are a few events like the UK GDP (Q3, 2017 – Forecast 1.5% versus the previous 1.5%) and the US Core Personal Consumption Expenditure (Nov 2017, MoM – Forecast +0.1% versus the +0.2% previous). Both events could impact the next move in the US Dollar and British Pound.
We are approaching Christmas holidays and the market will most likely be quiet. Therefore, the next daily analysis will be published on Jan 4, 2018.
Enjoy holidays everyone!!