USD/JPY Could Struggle Near 111.00 Resistance

Key Highlights

  • The US Dollar found support near 109.70 and recently rebounded higher against the Japanese Yen.
  • A crucial resistance is formed near the 111.00 zone on the 4-hours chart of USD/JPY.
  • The US Initial Jobless Claims for the week ending March 23, 2019 declined from 216K to 211K.
  • The US Personal Income for Feb 2019 is likely to increase 0.3% (MoM).

USDJPY Technical Analysis

After a major drop, the US Dollar found support near 109.70 level against the Japanese Yen. The USD/JPY pair started a solid recovery and traded above the 110.00 and 110.20 resistance levels.

USDJPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair traded above the 110.50 resistance and the 50% Fib retracement level of the last drop from the 111.69 high to 109.70 low.

To the topside, there is a strong resistance waiting near the 111.00 level, the 200 simple moving average (4-hours, green), and 100 simple moving average (4-hours, red). Besides, the 61.8% Fib retracement level of the last drop from the 111.69 high to 109.70 low is also near 111.00.

Therefore, it won’t be easy for buyers to clear the 111.00 resistance level. The next key resistance is near the 111.20 level, followed by 111.45. On the downside, there is a decent support formed near 110.15 and a short-term bullish trend line on the same chart.

Fundamentally, the US Initial Jobless Claims figure for the week ending March 23, 2019 was released by the US Department of Labor. The market was looking for a minor increase in claims from 221K to 225K.

The actual result was better than the forecast, as there was a decline in claims to 211K. Besides, the last reading was revised down from 221K to 216K.

The report added:

The 4-week moving average was 217,250, a decrease of 3,250 from the previous week’s revised average. The previous week’s average was revised down by 4,500 from 225,000 to 220,500.

Overall, USD/JPY is likely to struggle near the 111.00 barrier, above which there could be a sharp upward move. On the downside, the 110.20 and 110.00 levels are decent support levels.

Economic Releases to Watch Today

  • Germany’s Unemployment Change for March 2019 – Forecast -10K, versus -21K previous.
  • Germany’s Unemployment Rate for March 2019 – Forecast 4.9%, versus 5.0% previous.
  • UK GDP for Q4 2018 (QoQ) – Forecast +0.2%, versus +0.2% previous.
  • US Personal Income for Feb 2019 (MoM) – Forecast +0.3%, versus -0.1% previous.
  • US New Home Sales for Feb 2019 (MoM) – Forecast +1.3% versus -6.9% previous.
  • Chicago Purchasing Manager’s Index for March 2019 – Forecast 61.0, versus 64.7 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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