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Aayush Jindal

Key Highlights

  • USD/JPY broke the 105.00 and 105.50 resistance levels.
  • There was a break above a crucial declining channel with resistance at 104.35 on the daily chart.
  • EUR/USD spiked above 1.2200 before correcting lower, GBP/USD retested 1.4000.
  • The US GDP grew 4.1% in Q4 2021 (Prelim), up from 4%.

USD/JPY Technical Analysis

After trading close to 102.50 in Jan 2021, the US Dollar started a fresh increase against the Japanese Yen. USD/JPY broke the 104.00 resistance level to move into a positive zone.

Looking at the daily chart, the pair cleared many hurdles near 104.50 and 105.00. There was also a break above a crucial declining channel with resistance at 104.35. The pair settled nicely above 105.00 and the 100-day simple moving average (red).

There was a break above the 76.4% Fib retracement level of the downward move from the 106.22 high to 104.92 low. The pair is now showing a lot of positive signs above the 200-day simple moving average (green).

The first key resistance is near the 106.50 level. It is close to the 1.236 Fib extension level of the downward move from the 106.22 high to 104.92 low. The next major resistance is near the 107.00 level.

On the downside, the pair is likely to find support near the 105.60 and 105.50 levels. The main support is now forming near the USD 105.00 level.

Fundamentally, the US Gross Domestic Product for Q4 2021 (prelim) was released by the US Bureau of Economic Analysis. The market was looking for a growth of 4.1%.

The actual result was similar to the forecast, as the US GDP grew 4.1% in Q4 2021, up from 4% (according to the "second" estimate).

Looking at EUR/USD, the pair surpassed a major hurdle at 1.2200, but it failed to continue higher. GBP/USD corrected gains, but it stable above 1.3950. Besides, both AUD/USD and NZD/USD are correcting gains.

Economic Releases

  • US Personal Income Jan 2021 2021 (MoM) - Forecast +9.5%, versus +0.6% previous.
  • Chicago Purchasing Manager’s Index Feb 2021 – Forecast 61.1, versus 63.8 previous.