USD/JPY Upsides Remain Capped Near 106.5030 March, 2018 by Aayush Jindal in Market Analysis
- The US Dollar remains in a major bearish trend below 107.50 against the Japanese Yen.
- There is a key bearish trend line forming with current resistance at 106.50 on the daily chart of USD/JPY.
- The pair has to move above 106.50 and then 107.50 to move back in a bullish zone.
- Tokyo’s Consumer Price Index in March 2018 (YoY) increased 1.0%, compared with the +1.8% forecast.
USDJPY Technical Analysis
The US Dollar broke many supports during the past few weeks against the Japanese Yen. The USD/JPY pair recently traded as low as 104.62 and it remains at a risk of more losses.
Looking at the daily chart of USD/JPY, there was a downside break below two important support levels at 108.30 and 107.40. It opened the doors for more losses and the pair declined towards 105.00.
A low was formed at 104.62 from where a minor upside correction was initiated. It moved above the 23.6% Fib retracement level of the last decline from the 107.29 high to 104.62 low.
However, there are many hurdles on the upside such as a key bearish trend line with current resistance at 106.50 on the daily chart. Moreover, the 76.4% Fib retracement level of the last decline from the 107.29 high to 104.62 low is at 106.66 to prevent upsides.
The most important resistance on the upside remains at 107.40-50. A daily close above 107.50 is needed for the pair to overcome the current selling pressure. On the downside, the 104.50 and 104.00 levels are decent supports.
Today, Tokyo’s Consumer Price Index for March 2018 was released by the Statistics Bureau. The market was looking for a rise of 1.8% in the CPI compared with the same month a year ago.
The actual result was on the lower side as there was only 1.0% increase in the CPI (YoY) in March 2018.
Economic Releases to Watch Today
- France Consumer Price Index for March 2018 (Prelim) (YoY) – Forecast +1.5%, versus +1.3% previous.
- Italian Consumer Price Index for March 2018 (Prelim) (YoY) – Forecast +0.6%, versus +0.5% previous.