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USD/JPY Starts Corrective Decrease, 114.20 Is The Key

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Aayush Jindal

Key Highlights

  • USD/JPY failed to surpass the 116.40 resistance and corrected lower.
  • It traded below a major bullish trend line with support near 115.25 on the 4-hours chart.
  • EUR/USD is still struggling to clear the 1.1400 resistance.
  • GBP/USD eyes more upsides above 1.3620.

USD/JPY Technical Analysis

The US Dollar attempted a strong move above 116.00 against the Japanese Yen. However, USD/JPY failed to surpass 116.40 and started a downside correction.

Looking at the 4-hours chart, the pair formed a top near 116.33 and corrected lower. There was a move below the 116.00 and 115.80 support levels. The pair declined below the 50% Fib retracement level of the upward move from the 114.15 swing low to 116.33 high.

Besides, there was a break below a major bullish trend line with support near 115.25 on the same chart. The pair even declined below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

The next key support is near 114.65. It coincides with the 76.4% Fib retracement level of the upward move from the 114.15 swing low to 116.33 high.

Any more losses might send the pair towards 114.20. On the upside, the pair is facing resistance near the 115.50 level. The next major resistance is near the 115.80 level. A close above 115.80 could open the doors for a strong increase.

Looking at EUR/USD, the pair is still struggling to clear the 1.1400 resistance zone. Conversely, GBP/USD seems to be aiming a clear move above 1.3650.

Economic Releases

  • UK Retail Sales for Jan 2022 (YoY) - Forecast +8.7%, versus -0.9% previous.
  • UK Retail Sales for Jan 2022 (MoM) - Forecast +1.0%, versus -3.7% previous.
  • US Existing Home Sales for Jan 2022 (MoM) - Forecast -1.0%, versus -4.6% previous.
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