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USD/JPY Weekly Chart: 108.80 Presents Major Resistance

Aayush Jindal

Aayush Jindal

Key Highlights

  • USD/JPY started a strong increase above the 105.50 and 106.50 resistance levels.
  • A crucial bearish trend line is forming with resistance near 108.80 on the weekly chart.
  • The US Initial Jobless Claims in the week ending Feb 27, 2021 increased from 736K to 745K.
  • The US nonfarm payrolls could rise 182K in Feb 2020, up from the last 49K.

 

USD/JPY Technical Analysis

After forming a base above 102.50, the US Dollar started a strong increase against the Japanese Yen. USD/JPY broke the 105.00 resistance to move into a positive zone.

Looking at the weekly chart, the pair gained pace above the 105.50 and 106.50 resistance levels. There was a clear break above the 50% Fib retracement level of the downward move from the 109.84 high to 102.59 low.

It is now trading above the 107.50 resistance zone and the 100-week simple moving average (red). The first major resistance is near the 108.20 level. There is also a crucial bearish trend line forming with resistance near 108.80 on the same chart.

The 200-week simple moving average (green) is also near the trend line. A clear break above 108.20 and 108.80 could be difficult in the near term.

On the downside, an immediate support is near the 106.80. The main support is near the 106.20 level, below which there is a risk of a drop towards the 105.50 level.

Overall, USD/JPY broke many hurdles on the weekly chart, but it is still facing a strong resistance near 108.80. Looking at EUR/USD, the pair traded below the 1.2000 support, and GBP/USD is still well below 1.4000.

Economic Releases

  • US nonfarm payrolls Feb 2020 – Forecast 182K, versus 49K previous.
  • US Unemployment Rate Feb 2020 - Forecast 6.3%, versus 6.3% previous.