USD/JPY Correction Could Be Limited Below 110.00
- USD/JPY extended its increase above the 111.00 resistance level.
- A key bullish trend line is forming with support near 110.00 on the 4-hours chart.
- EUR/USD must settle above 1.1950 for a decent recovery, GBP/USD failed to surpass 1.4000.
- The US GDP grew 6.4% in Q1 2021, similar to the market forecast.
USD/JPY Technical Analysis
The US Dollar followed a bullish path above the 110.00 level against the Japanese Yen. USD/JPY even moved above the 110.50 resistance to move further into a positive zone.
Looking at the 4-hours chart, the pair gained pace and it even spiked above the 111.00 level. A high was formed near 111.11 and the pair settled nicely above the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
An immediate support on the downside is near the 110.50 level. The first major support is near the 110.40 level. It is near the 50% Fib retracement level of the upward move from the 109.71 swing low to 111.11 high.
The main support is forming near the 110.00 level. There is also a key bullish trend line forming with support near 110.00 on the same chart.
On the upside, the pair could face resistance near 111.20 level. Any more gains may possibly open the doors for a move towards 112.00.
Fundamentally, the US Gross Domestic Product report for Q1 2021 was released yesterday. by the US Bureau of Economic Analysis. The market was looking for a growth of 6.4% in the GDP.
The actual result was similar to the market forecast, as the US real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021.
The report added:
The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic.
Looking at EUR/USD, the pair is still facing a strong barrier near 1.2000. Similarly, GBP/USD is struggling to surpass 1.4000.
- Germany’s GfK Consumer Confidence for July 2021 – Forecast -4, versus -7 previous.
- US Personal Income for May 2021 (MoM) - Forecast -2.5%, versus -13.1% previous.