- USD/JPY started a fresh decline below the 128.80 support.
- A key bearish trend line is forming with resistance near 127.65 on the 4-hours chart.
- EUR/USD recovered above 1.0700, and GBP/USD is showing positive signs.
- The US GDP contracted 1.5% in Q1 2022 (Prelim), more than the market forecast.
USD/JPY Technical Analysis
The US Dollar started a fresh decline from well above 130.50 against the Japanese Yen. USD/JPY corrected lower below the 130.00 and 128.80 support levels.
Looking at the 4-hours chart, the pair extended decline below the 128.00 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours). The decline was such that the pair traded as low as 126.35.
Recently, there was a consolidation phase above 126.80. However, the bears were active near the 127.65 level. There is also a key bearish trend line forming with resistance near 127.65 on the same chart.
The next major resistance sits near 128.00. It is close to the 50% Fib retracement level of the key decline from the 129.78 swing high to 126.35 low.
A clear move above the 128.00 level might push the pair towards the key 128.80 resistance zone. The next major barrier could be 130.00. If not, there is a risk of another decline below the 126.50 level. The next key support is near 125.00.
Fundamentally, the US Gross Domestic Product for Q1 2022 (Prelim) was released by the US Bureau of Economic Analysis. The market was looking for a 1.3% decline in the GDP.
The actual result was disappointing, as the US Gross Domestic Product contracted 1.5% in Q1 2022, more than the last reading of 1.4%.
Looking at EUR/USD, the pair was able to clear the key 1.0620 and 1.0650 resistance levels to start a decent recovery wave.
- US Personal Income for April 2022 (MoM) - Forecast +0.5%, versus +0.5% previous.
- US Personal Spending for April 2022 (MoM) - Forecast +0.7%, versus +1.1% previous.