USD/JPY Corrects Lower, Key Support Nearby
- USD/JPY started a downside correction after trading to a new multi-week high at 110.96.
- A crucial bearish trend line is forming with resistance near 110.20 on the 4-hours chart.
- EUR/USD could climb further above 1.1920, GBP/USD is likely to stay above 1.3700.
- The US Initial Jobless Claims in the week ending April 03, 2021 increased from 728K to 744K.
USD/JPY Technical Analysis
In the past few days, the US Dollar gained pace above 108.50 against the Japanese Yen. USD/JPY even broke the 110.00 resistance and traded to a new multi-week high before correcting lower.
Looking at the 4-hours chart, the pair traded as high as 110.96 and recently corrected lower. There was a break below the 110.40 and 110.00 support levels. The pair even traded below the 109.80 support level and the 100 simple moving average (red, 4-hours).
There was a clear break below the 50% Fib retracement level of the upward move from the 108.40 swing low to 110.96 high.
The pair even tested the 109.00 level. The next key support is near the 108.50 zone (the last major breakout zone) or the 200 simple moving average (green, 4-hours). Any more losses may possibly call for a move towards the 108.00 support in the coming sessions.
Conversely, there could be a fresh increase above the 109.50 resistance and the 100 simple moving average (red, 4-hours). The next major resistance is near 110.00 level. There is also a crucial bearish trend line forming with resistance near 110.20 on the same chart.
Looking at EUR/USD, the pair could attempt an upside break above 1.1920. On the other hand, GBP/USD is struggling to recover, but it is holding the 1.3700 support.
- US Producer Price Index for March 2021 (MoM) – Forecast +0.5%, versus +0.5% previous.
- US Producer Price Index for March 2021 (YoY) – Forecast +3.8%, versus +2.08% previous.
- Canada’s employment Change payrolls for March 2021 – Forecast 100K, versus 259.2K previous.
- Canada’s Unemployment Rate for March 2021 - Forecast 8%, versus 8.2% previous.