USD/JPY Eyeing More Upsides Above 109.00

Key Highlights

  • The US Dollar climbed higher recently from the 108.00 support against the Japanese Yen.
  • USD/JPY traded above a key bearish trend line at 108.15 on the 4-hours chart.
  • The US Initial Jobless Claims for the week ending July 20, 2019 declined from 216K to 206K.
  • The US Gross Domestic Product in Q2 2019 (Prelim) might grow 1.8%, less than the last +3.1%.

USDJPY Technical Analysis

The US Dollar started a decent upward move from the 107.20 swing low against the Japanese Yen. The USD/JPY pair gained traction above 108.00 and it seems like it could even surpass 109.00 in the near term.

USDJPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair formed a solid support near the 108.00 level and recently started a decent increase. There was a close above the 108.20 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

Moreover, the pair traded above a key bearish trend line at 108.15 on the same chart. It opened the doors for more gains above the 108.50 resistance.

The pair traded close to the 108.80 level and it is currently consolidating gains. An initial support is near the 108.50 level. However, the main support is near 108.35 plus the 50% Fib retracement level of the upward move from the 107.93 low to 105.75 high.

Therefore, if there is a downside correction, the pair could find bids near the 108.50 or 108.35 levels. To start a substantial decrease, the pair must trade below the 108.00 support and the 100 simple moving average (red, 4-hours).

On the upside, an initial resistance is near the 108.80 level, above which the pair might attempt more upsides above the 109.00 level.

Fundamentally, the US Initial Jobless Claims figure for the week ending July 20, 2019 was released by the US Department of Labor. The market was looking for a minor increase in claims from 216K to 219K.

However, the actual result better than the forecast, as there was a decline in the US Initial Jobless Claims from 216K to 206K.

The report added:

The advance number for seasonally adjusted insured unemployment during the week ending July 13 was 1,676,000, a decrease of 13,000 from the previous week’s revised level. The previous week’s level was revised up 3,000 from 1,686,000 to 1,689,000.

Overall, the US Dollar bulls remain in control and pairs such as EUR/USD, GBP/USD and AUD/USD might continue to face selling pressure.

Economic Releases to Watch Today

  • US Gross Domestic Product Q2 2019 (Preliminary) – Forecast 1.8% versus previous 3.1%.
  • US Personal Consumption Expenditures Prices for Q3 2019 (QoQ) – Forecast +0.6%, versus +0.5% 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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