USDJPY – US Dollar Establish a Bearish Trend Vs Japanese Yen

Key Highlights

  • The US Dollar has formed a short-term top near 114.37 against the Japanese Yen.
  • The USDJPY moved down sharply, and broke a major bullish trend line at 113.50 on the 4-hours chart.
  • Today in Japan, the Gross Domestic Product for Q1 2017 (Preliminary) reading released by the Cabinet Office posted an increase of 2.2%.
  • In the US, Initial Jobless Claims will be released by the US Department of Labor today, which is forecasted to increase from 236K to 240K.

USDJPY Technical Analysis

There were continuous gains in the US Dollar from the 110.00 swing low against the Japanese Yen. However, it looks like USDJPY struggled above 114.00, and now forming a bearish trend.

USDJPY Technical Analysis US Dollar Japanese Yen

The pair traded as high as 114.37 where it failed, and moved down. During the downside move, there was a break below the 23.6% Fib retracement level of the last wave from the 109.59 low to 114.37 high.

However, the most important move was below a major bullish trend line at 113.50 on the 4-hours chart. It has opened the doors for more declines.

Going forward, there are chances of USDJPY breaking 111.00 for further declines. The next stop could be near the full extension of the last wave from the 109.59 low to 114.37 high at 109.50.

On the upside, the 112.00 handle might act as a resistance if the pair moves higher.

Japan’s Gross Domestic Product

Today in Japan, the Gross Domestic Product for Q1 2017 (Preliminary) reading was released by the Cabinet Office. The forecast was lined up for an increase of 1.7% in the GDP in Q1 2017, compared with the same quarter a year ago.

The result was better than the forecast, as the GDP grew by 2.2% in Q1 2017. It helped the Japanese Yen in gaining traction, and USDJPY fell below the 112.00 support area.

Economic Releases to Watch Today

  • UK Retail Sales for April 2017 – Forecast +2% (YoY) versus +1.7% previous.
  • UK Retail Sales for April 2017 – Forecast +1% (MoM) versus -1.8% previous.
  • UK Retail Sales ex-fuel for April 2017 – Forecast +2.5% (YoY) versus +2.6% previous.
  • UK Retail Sales ex-fuel or April 2017 – Forecast +1% (MoM) versus -1.5% previous.
  • US Initial Jobless Claims – Forecast 240K, versus 236K previous.
  • Philadelphia Fed Manufacturing Index May 2017 – Forecast 19.5 versus 22.0 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