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USD/JPY Struggles Below 105.00, Key Support at 104.00

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Aayush Jindal

Key Highlights

  • USD/JPY struggled to climb above the 104.75 and 105.00 resistance levels.
  • A major bullish trend line is forming with support near 103.90 on the 4-hours chart.
  • Japan’s Leading Economic Index improved from 88.5 to 92.5 in Sep 2020.
  • EUR/USD and GBP/USD struggled to gain momentum above 1.1940 and 1.3400 respectively.

USD/JPY Technical Analysis

After forming a support base above 103.65, the US Dollar started a fresh increase against the Japanese Yen. USD/JPY climbed above 104.50, but it struggled to surpass the 104.75 and 105.00 resistance levels.

Looking at the 4-hours chart, the pair topped near the 104.76 level and the 200 simple moving average (green, 4-hours). There was a bearish reaction below the 104.50 support level and the 100 simple moving average (red, 4-hours).

The pair even tested the 50% Fib retracement level of the upward move from the 103.65 low to 104.76 high. On the downside, there are a few important supports waiting near 104.05 and 104.00.

There is also a major bullish trend line forming with support near 103.90 on the same chart. If there is a downside break below 104.00 and the trend line, the pair might even decline below the 103.65 support level.

The next major support sits at 103.25. On the upside, the 104.75 and 105.00 levels are important barriers. A daily close above 105.00 could open the doors for a larger increase towards 105.50 or even 105.80.

Looking at EUR/USD, the pair failed to clear the 1.1940 and 1.1950 resistance levels. Similarly, GBP/USD failed to surpass the main 1.3400 resistance level. Besides, gold price started a short-term upside correction, and crude oil price tested $46.00 before correcting lower.

Upcoming Economic Releases

  • Euro Zone Consumer Confidence Nov 2020 – Forecast 86.5, versus 90.9 previous.
  • Euro Zone Business Climate Index Nov 2020 – Forecast -0.80, versus -0.74 previous.
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