Downsides In USD/JPY Remains Supported08 March, 2019 by Aayush Jindal in Market Analysis
- The US Dollar climbed higher recently above the 112.00 level against the Japanese Yen.
- There is a strong support formed near the 111.20 level on the 4-hours chart of USD/JPY.
- The US Initial Jobless Claims for the week ending Feb 26, 2019 declined from 226K to 223K.
- The US nonfarm payrolls for Feb 2019 will be released today, which could post 180K, down from 304K.
USDJPY Technical Analysis
The US Dollar followed a bullish path from the 110.35 swing low and climbed higher against the Japanese Yen. The USD/JPY pair broke the 111.00 and 111.80 resistance levels to move into a positive zone.
Looking at the 4-hours chart, the pair placed itself above the 111.20 pivot level, the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours). It opened the doors for more gains and the pair recently climbed above the 112.00 level.
It traded as high as 112.13 and later corrected lower below the 111.80 level and the 23.6% Fib retracement level of the last wave from the 110.35 low to 112.13 high.
However, there is a strong support formed on the downside near the 111.20 level. It coincides with the 50% Fib retracement level of the last wave from the 110.35 low to 112.13 high, plus a bullish trend line on the same chart.
Below 111.20, the next key support is near 111.00 and the 100 simple moving average (red, 4-hours). If there is a close below the 111.00 support, the pair could extend correction towards the 110.50 level.
On the upside, an initial resistance is near the 112.00 level, above which buyers are likely to push the pair above the 112.20 and 112.40 levels.
Fundamentally, the US Initial Jobless Claims figure for the week ending Feb 26, 2019 was released recently. The market was looking for no change from the last reading of 225K.
The result was mixed as the US Initial Jobless Claims declined to 223K, but the last reading was revised up from 225K to 226K. The report added that:
The 4-week moving average was 226,250, a decrease of 3,000 from the previous week’s revised average. The previous week’s average was revised up by 250 from 229,000 to 229,250.
Economic Releases to Watch Today
- US nonfarm payrolls Feb 2019 – Forecast 180K, versus 304K previous.
- US Unemployment Rate Feb 2019- Forecast 3.9%, versus 4.0% previous.
- Canada’s employment Change Feb 2019 – Forecast 2K, versus 66.8K previous.
- Canada’s Unemployment Rate Feb 2019 – Forecast 5.8%, versus 5.8% previous.