USD/JPY Eyes Upside Break As Russia-Ukraine Tension Escalates
- Russia-Ukraine crisis sparked sharp moves in the market.
- Gold and oil prices rallied and broke many important hurdles.
- EUR/USD declined heavily below 1.1280, and GBP/USD tumbled below 1.3450.
- The US GDP increased 7% in Q4 2021 (Preliminary), up from 6.9%.
USD/JPY Technical Analysis
The US Dollar failed to surpass 116.40 against the Japanese Yen. USD/JPY corrected lower, but it remained stable above the 114.40 support.
Looking at the 4-hours chart, the pair traded as low as 114.40 and recently corrected higher. There was a move above the 23.6% Fib retracement level of the downward move from the 116.33 swing high to 114.40 low.
It is now attempting an upside break above the 115.20 resistance and the 100 simple moving average (red, 4-hours). There is also a major bearish trend line forming with resistance near 115.20 on the same chart.
The next major resistance is near the 115.50 level. Any more gains might send the pair towards the 116.20 level. If there is no upside break, the pair could decline below the 114.65 level. The next key support is near 114.40.
If there is a downside break, the pair could decline towards the 114.25 level. Any more losses might send the pair towards the 113.50 level.
Fundamentally, the US Gross Domestic Product for Q4 2021 (Prelim) was released yesterday by the US Bureau of Economic Analysis. The market was looking for a 7% growth.
The actual result was similar to the market forecast, as the US Gross Domestic Product grew 7% in Q4 2021. Besides, the GDP Price Index climbed 7.3%, up from the last 7%.
Looking at EUR/USD, the pair declined heavily after Russia’s attack on Ukraine. Similarly, GBP/USD declined over 200 pips.
- German GDP for Q4 2021 (YoY) (Preliminary) – Forecast 1.4%, versus 1.4% previous.
- German GDP for Q4 2021 (QoQ) (Preliminary) – Forecast -0.7%, versus -0.7% previous.
- Euro Zone Consumer Confidence for Feb 2022 – Forecast -8.8, versus -8.8 previous.
- US Durable Goods Orders for Jan 2022 – Forecast +0.8% versus -0.7% previous.