USD/JPY Rallies Above 109.00, EUR/USD & GBP/USD Rising

Key Highlights

  • USD/JPY rallied sharply after testing the 108.40 support.
  • A major bullish trend line is in place with support near 108.45 on the 4-hours chart.
  • The US Initial Jobless Claims for the week ending Dec 07, 2019 increased from 203K to 252K.
  • The US Retail Sales is likely to increase 0.5% in Nov 2019 (MoM), more than the last +0.3%.

USD/JPY Technical Analysis

This past month, the US Dollar topped near the 109.72 level against the Japanese Yen. USD/JPY declined heavily and broke a few key supports near 109.00 before testing the 108.40 support.

USD/JPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair settled below the 109.00 level, the 100 simple moving average (red), and the 200 simple moving average (green).

The last swing low was near 108.42 before the pair started a strong rise above 108.70. Besides, the pair surpassed the 50% Fib retracement level of the downward move from the 109.72 high to 108.42 low.

The pair is trading above the 109.20 resistance and consolidating in a range above the 109.50 area. If there is a downside break below the 109.40 and 109.20 supports, the pair could correct lower towards the 108.45 support.

On the upside, an initial resistance is near the 109.65 and 109.80 levels. A successful close above 109.80 and 110.00 might set the pace for further gains in the coming days.

Fundamentally, the US Initial Jobless Claims figure for the week ending Dec 07, 2019 was released by the US Department of Labor. The market was looking for an increase in claims from 203K to 213K.

However, the actual result was very disappointing as the US Initial Jobless Claims increased from 203K to 252K. Moreover, this is the highest level since September 30, 2017 when it was 257,000.

The report added:

The 4-week moving average was 224,000, an increase of 6,250 from the previous week’s unrevised average of 217,750.

Overall, USD/JPY might struggle to continue above 109.80 and 110.00. Looking at GBP/USD, the pair spiked above the 1.3500 resistance area. Besides, EUR/USD extended its recovery above the key 1.1150 resistance area.

Upcoming Economic Releases

  • US Retail Sales Nov 2019 (MoM) – Forecast +0.5%, versus +0.3% previous.
  • US Retail Sales Control Group Nov 2019 (MoM) – Forecast +0.3%, versus +0.3% 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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