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USD/JPY Nosedives and At Risk of More Downsides

Key Highlights

  • USD/JPY started a fresh decline from the 134.80 resistance.
  • It traded below a key bullish trend line with support near 132.10 on the 4-hours chart.
  • EUR/USD surged above the 1.0750 resistance zone.
  • The UK GDP could contract 0.2% in Nov 2022 (MoM), down from +0.5%.


USD/JPY Technical Analysis

The US Dollar failed again to clear the 134.80 resistance against the Japanese Yen. USD/JPY started a fresh decline and traded below the 133.50 support.

Looking at the 4-hours chart, the pair extended its decline below the 132.50 level, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

The pair also traded below a key bullish trend line with support near 132.10 on the same chart. There was a clear move below the 61.8% Fib retracement level of the upward move from the 129.50 swing low to 134.77 high.

On the downside, there is a major support at 129.20. The next major support is near the 128.80 level. A downside break below the 128.80 zone might push the pair lower.

The next major support sits near the 127.50 level. Any more losses might open the doors for a move towards the 126.00 support zone.

On the upside, an initial resistance is near the 131.50 level. The next major resistance may perhaps be near 132.00. A clear move above the 132.00 resistance might start a steady increase. In the stated case, USD/JPY could even surpass the 132.50 level. In the stated case, the pair could rise towards the 133.20 level.

Looking at EUR/USD, the pair gained pace and was able to clear the 1.0750 resistance zone, opening the doors for more gains.

Economic Releases

  • UK GDP for Nov 2022 (MoM) - Forecast -0.2%, versus +0.5% previous.
  • UK Industrial Production for Nov 2022 (MoM) - Forecast -0.3%, versus 0% previous.
  • UK Manufacturing Production for Nov 2022 (MoM) - Forecast -0.2%, versus +0.7% previous.