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USD/JPY Recovery Could Face Uphill Task – Here’s Why

Key Highlights

  • USD/JPY is attempting a fresh increase from the 147.15 zone.
  • A connecting bearish trend line is forming with resistance near 150.00 on the 4-hour chart.
  • EUR/USD is showing positive signs above the 1.0850 support.
  • GBP/USD could extend its rally above the 1.2550 resistance.

 

USD/JPY Technical Analysis

The US Dollar declined heavily from the 151.90 zone against the Japanese Yen. USD/JPY declined below 150.00 and 149.20 before the bulls took a stand.

Looking at the 4-hour chart, the pair traded as low as 147.14 before it started a decent recovery wave. There was a move above the 148.40 and 148.50 resistance levels. The pair even tested the 50% Fib retracement level of the downward move from the 151.90 swing high to the 147.14 low.

However, the pair is still below the 150.00 barrier, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

There is also a connecting bearish trend line forming with resistance near 150.00 on the same chart. The next key resistance is near the 150.20 level. The main resistance is now near the 150.50 level. A close above the 150.50 zone could open the doors for more upsides. The next stop for the bulls might be 152.00.

If not, the pair might start a fresh decline below the 148.80 support. The first major support is now forming near the 148.50 level. The next key support sits at 148.00, below which the pair could test the 147.50 pivot level in the near term.

Looking at GBP/USD, the pair gained strength above the 1.2500 level and it could even climb toward the 1.2620 resistance.

Economic Releases

  • US Manufacturing PMI for Nov 2023 (Preliminary) – Forecast 49.8, versus 50.0 previous.
  • US Services PMI for Nov 2023 (Preliminary) – Forecast 50.4, versus 50.6 previous.