USD/JPY Remains At Risk of Further Declines05 July, 2019 by Aayush Jindal in Market Analysis
- The US Dollar failed to surpass the 108.50 resistance against the Japanese Yen.
- A crucial bearish trend line is forming with resistance near 108.40 on the 4-hours chart.
- The Euro Area Retail Sales declined 0.3% in May 2019 (MoM), whereas the forecast was +0.3%.
- The US nonfarm payrolls in June 2019 could change 160K, more than the last 75K.
USDJPY Technical Analysis
After trading as low as 106.77, the US Dollar started a decent upward move against the Japanese Yen. The USD/JPY pair traded above the 108.00 resistance, but it struggled to clear the 108.50 resistance area.
Looking at the 4-hours chart, the pair gained bullish momentum above the 107.80 and 108.00 resistance levels. It even broke the 108.20 resistance plus the 100 simple moving average (red, 4-hours).
However, the 108.50 level acted as a strong resistance and the pair remained well below the 200 simple moving average (green, 4-hours). More importantly, USD/JPY failed to clear a crucial bearish trend line with current resistance near 108.40 on the same chart.
Recently, the pair corrected lower below 108.00 and the 100 simple moving average (red, 4-hours). It tested the 50% Fib retracement level of the upward move from the 106.77 low to 108.51 high.
The main support on the downside is near the 107.60 and 107.50 levels. If there is a downside break below the 107.50 support, the pair could revisit the 107.00 support area.
An intermediate support is 107.18, coinciding with the 76.4% Fib retracement level of the upward move from the 106.77 low to 108.51 high.
Looking at EUR/USD and GBP/USD, both pairs struggled to hold key supports and declined below 1.1320 and 1.2620 respectively. Today’s NFP release in the US could change the market sentiment and likely to impact USD/JPY as well in the near term.
Economic Releases to Watch Today
- US nonfarm payrolls June 2019 – Forecast 160K, versus 75K previous.
- US Unemployment Rate June 2019 – Forecast 3.6%, versus 3.6% previous.
- Canada’s employment Change payrolls June 2019 – Forecast 10K, versus 27.7K previous.
- Canada’s Unemployment Rate June 2019 – Forecast 5.5%, versus 5.4% previous.