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Aayush Jindal

Key Highlights

  • USD/JPY declined heavily after it broke the 145.50 support zone.
  • A major bearish trend line is forming with resistance near 143.80 on the 4-hours chart.
  • EUR/USD and GBP/USD started a downside correction.
  • Oil price might dive if there is a close below $82.65.

USD/JPY Technical Analysis

The US Dollar started a major decline from well above the 148.00 level against the Japanese Yen. USD/JPY declined below the 146.50 and 145.50 support levels.

Looking at the 4-hours chart, the pair gained bearish momentum below the 143.80 level, the 100 simple moving average (red, 4-hours) plus the 200 simple moving average (green, 4-hours).

The bears even pushed the pair below the 140.00 level. It traded as low as 137.66 and is currently correcting losses. There was a minor increase above the 140.00 level. The pair climbed above the 23.6% Fib retracement level of the downward move from the 148.85 swing high to 137.66 low.

On the upside, an immediate resistance is near 141.50 level. The next major resistance may perhaps be near 142.00. Any more gains could set the pace for a move towards the 143.80 resistance zone.

There is also a major bearish trend line forming with resistance near 143.80 on the same chart, above which it could even test 145.00.

An initial support is near the 139.20 level. The next major support is near the 138.80 zone. The main support sits at 138.00. A close below the 138.00 level might start another strong decline. In the stated case, USD/JPY could decline towards the 135.00 support.

Looking at oil price, there was a downside extension below the $85.50 level and there is a risk of more losses in the near term.

Economic Releases

  • UK Retail Sales for Oct 2022 (YoY) - Forecast -6.5%, versus -6.9% previous.
  • UK Retail Sales for Oct 2022 (MoM) - Forecast 0%, versus -1.4% previous.
  • US Existing Home Sales for Oct 2022 (MoM) - Forecast -0.1%, versus -1.5% previous.