USD/JPY Primed For More Upsides In Near Term

Key Highlights

  • The US Dollar broke a crucial resistance near 108.40 against the Japanese Yen.
  • USD/JPY remains well supported near 108.40 and 108.00.
  • EUR/USD climbed higher sharply and broke the key 1.1060 resistance area.
  • GBP/USD rallied significantly above 1.2950 before correcting lower.

USD/JPY Technical Analysis

In the past few days, there was a steady rise in USD/JPY from the 107.60 support. The US Dollar surpassed a major hurdle near 108.40 against the Japanese Yen to move into a positive zone.

USD/JPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair followed a bullish path above 108.00 and the 100 simple moving average (red, 4-hours). As a result, there was a significant break above 108.40 and the pair traded close to the 109.00 level.

A high was formed near 108.93 before the pair started a downside correction. It traded below the 23.6% Fib retracement level of the last wave from the 108.03 low to 108.93 high.

However, there are many key supports forming near the 108.40 and 108.20 level. Moreover, there is a major bullish trend line forming with support near 108.25 on the same chart.

If there is a downside break below 108.20 and 108.00, the pair could start a fresh decrease. On the upside, the main resistance is near 109.00, above which there are chances of more gains towards the 110.00 level in the near term.

Fundamentally, the US Initial Jobless Claims figure for the week ending 12 Oct, 2019 was released by the US Department of Labor. The market was looking for an increase in claims from 210K to 215K.

However, the actual result was better than the forecast, as claims increased only to 214K. Besides, the 4-week moving average came in at 214,750, up 1,000 from the previous week’s unrevised average of 213,750.

The report added:

The advance number for seasonally adjusted insured unemployment during the week ending October 5 was 1,679,000, a decrease of 10,000 from the previous week’s revised level. The previous week’s level was revised up 5,000 from 1,684,000 to 1,689,000.

Overall, USD/JPY remains well supported above 108.00. More importantly, both EUR/USD and GBP/USD gained pace recently, but they might correct lower in the short term.

Upcoming Economic Releases

  • Euro Zone Current Account for Aug 2019 (s.a.) – Forecast €26.70B versus €20.55B previous.
  • Euro Zone Current Account for Aug 2019 (n.s.a.) – Forecast €17.60B versus €29.84B 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.

Aayush's latest posts