USD/JPY Looks Set to Trade Higher

Key Highlights

  • The US Dollar formed a major support at 104.60 and recovered nicely against the Japanese Yen.
  • There was a break above a significant bearish trend line with resistance at 106.35 on the daily chart of USD/JPY.
  • The US Initial Jobless Claims in the week ending April 7th, 2018 declined from 242K to 233K.
  • Today, the Michigan Consumer Sentiment Index for April 2018 (Prelim) will be released, which is forecasted to decline from 101.4 to 100.5.

USDJPY Technical Analysis

The US Dollar started an upside move after trading as low as 104.63 against the Japanese Yen. The USD/JPY broke a few resistances such as 105.00 and 106.00 to move back in a positive zone.

USDJPY Technical Analysis US Dollar Japanese Yen

Looking at the daily chart, the pair broke the 23.6% Fib retracement level of the last decline from the 110.48 high to 104.63 low. Moreover, there was a break above a significant bearish trend line with resistance at 106.35.

It opened the doors for more gains with a close above the 106.50 pivot level. Going forward, the pair has to break the 107.60 resistance, and the 50% Fib retracement level of the last decline from the 110.48 high to 104.63 low to gain bullish momentum.

The next major hurdle for buyers is near the 108.40 level, which was a support earlier. On the downside, supports are at 106.50 and 106.20.

Recently in the US, the Initial Jobless Claims for the week ending April 7th, 2018 was released by the US Department of Labor. The market was positioned for decline in claims from 242K to 230K.

The actual result a bit on the lower side, as the decline in claims was less at 233K. Still, there was a decrease of 9K in claims, which is a positive sign. The report added that:

The 4-week moving average was 230,000, an increase of 1,750 from the previous week’s unrevised average of 228,250.

Overall, the US Dollar may continue to rise versus the Japanese Yen, and other major pairs such as EUR/USD could decline in the short term.

Economic Releases to Watch Today

  • German Consumer Price Index for March 2018 (YoY) – Forecast +1.6%, versus +1.6% previous.
  • German Consumer Price Index for March 2018 (MoM) – Forecast +0.4%, versus +0.4% previous.
  • Michigan Consumer Sentiment Index for April 2018 (Prelim) – Forecast 100.5, versus 101.4 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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