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USD/JPY Nears Key Support As Dollar Trims Gains

Key Highlights

  • USD/JPY started a downside correction below 132.50.
  • A major bullish trend line is forming with support near 129.10 on the 4-hours chart.
  • EUR/USD and GBP/USD started an upside correction.
  • Gold price might recover if it clears the $1,900 resistance zone.


USD/JPY Technical Analysis

The US Dollar failed again to clear the 133.00 resistance against the Japanese Yen. USD/JPY started a fresh decline below the 132.50 and 132.20 support levels.

Looking at the 4-hours chart, the pair declined below the 131.50 support zone and the 200 simple moving average (green, 4-hours). There was also a spike below the 50% Fib retracement level of the upward move from the 128.07 swing low to 132.90 high.

An immediate support is near the 130.00 zone or the 100 simple moving average (red, 4-hours). It is near the 61.8% Fib retracement level of the upward move from the 128.07 swing low to 132.90 high.

The next major support is near the 129.20 level. There is also a major bullish trend line forming with support near 129.10 on the same chart. If there is a downside break, the pair could decline towards the 128.50 level.

On the upside, the pair is facing resistance near the 131.20 level. The next major resistance is near the 131.50 level. A clear move above the 131.50 resistance might start a steady increase towards the 132.00 resistance zone.

Any more gains could open the doors for a move towards the 132.50 level. The next key hurdle is near 133.00, above which the pair could climb towards the 134.20 resistance zone.

Looking at gold price, the bulls may perhaps attempt a recovery wave above the key $1,900 resistance zone in the near term.

Economic Releases

  • UK GDP for Dec 2022 (MoM) - Forecast -0.3%, versus +0.1% previous.
  • Canada’s employment Change for Jan 2023 – Forecast 15K, versus 104K previous.
  • Canada’s Unemployment Rate April 2023 - Forecast 5.1%, versus 5% previous.