USD/JPY Could Gain Bullish Momentum Above 109.50

Key Highlights

  • The US Dollar traded higher and broke the 108.00 resistance against the Japanese Yen.
  • There was a break above a major bearish trend line with resistance at 108.40 on the 4-hours chart of USD/JPY.
  • The US Initial Jobless Claims for the week ending Jan 12, 2019 declined from 216K to 213K.
  • The US Industrial Production for Dec 2018 will be released today, which could increase 0.2% (MoM).

USDJPY Technical Analysis

In the past few days, the US Dollar traded with a positive bias above 107.80 against the Japanese Yen. The USD/JPY pair must surpass the 109.50 resistance to gain further bullish momentum.

USDJPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair traded above the 107.50 and 107.80 resistance levels to place itself in a positive zone. There was also a break above the 50% Fib retracement level of the last decline from the 111.40 high to 104.64 low.

Moreover, there was a break above a major bearish trend line with resistance at 108.40 on the same chart. The pair even traded above the 108.80 level, but a close above the 109.50 resistance is must for an upside extension.

The next resistance is at 109.80 and the 76.4% Fib retracement level of the last decline from the 111.40 high to 104.64 low, followed by 110.00.

On the downside, the 108.00 and 107.80 levels are important supports, below which the pair may move back in a bearish zone. The next key supports are 107.20 and 106.80.

Fundamentally, the US Initial Jobless Claims figure for the week ending Jan 12, 2019 was released recently. The market was looking for an increase from the last reading of 216K to 220K.

However, the actual result was better than the forecast as there was a decline in the US Initial Jobless Claims from 216K to 213K. The report added:

The advance number for seasonally adjusted insured unemployment during the week ending January 5 was 1,737,000, an increase of 18,000 from the previous week’s revised level.

Overall, the US Dollar remains supported on dips versus the Japanese Yen unless there is a close below the 107.80 support.

Economic Releases to Watch Today

  • UK Retail Sales for Dec 2018 (YoY) – Forecast +3.6%, versus +3.6% previous.
  • UK Retail Sales for Dec 2018 (MoM) – Forecast -0.8%, versus +1.4% previous.
  • US Industrial Production Dec 2018 (MoM) – Forecast +0.2%, versus +0.6% previous.
  • US Capacity Utilization Dec 2018 – Forecast 78.5%, versus 78.5% previous.
  • Canadian Consumer Price Index Dec 2018 (MoM) – Forecast -0.4%, versus -0.4% previous.
  • Canadian Consumer Price Index Dec 2018 (YoY) – Forecast +1.7%, versus +1.7% previous.


Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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