USDJPY 123.00-20 Is a Significant Resistance by Greece Exit

Key Highlights

  • Japanese Yen gained bids this week due to the potential Greece exit, and most yen pairs opened the week with a gap lower.
  • USDJPY pair managed to break an important bearish trend line, but facing a major resistance around 123.00-20.
  • Japanese Tankan Large Manufacturing Index released by the Bank of Japan came in at 15 in Q2, up from the last reading of 12.
  • Chinese official non-manufacturing PMI released by China Federation of Logistics and Purchasing (CFLP) increased from 53.2 to 53.8 in June 2015.

USDJPY Technical Analysis

The US Dollar enjoyed a decent ride against most of its counterparts, as the greenback benefited from the ongoing tensions in the Euro zone. However, the Japanese Yen was also benefited due to the risk-off sentiment. As a result, the USDJPY pair was seen trading lower this week, and it opened with a gap lower. The pair tested 122.00 support area where it managed to gain bids and traded higher. There was a bearish trend line formed on the hourly chart, which was breached recently to set the tone for upcoming sessions.

USDJPY

Currently, the pair is trading near the 50% Fib retracement level of the last drop from the 123.18 high to 121.92 low. There is a chance of a minor correction, which might find support around the broken trend line. The most important resistance is building around the last swing high of 123.20. The 100 and 200 simple moving averages are aligned around the mentioned level, suggesting that the pair might face sellers.

On the downside, the 122.20 level is an immediate support, followed by the last swing low of 121.92.

Japanese Tankan Large Manufacturing Index

Earlier during the Asian session, the Japanese Tankan Large Manufacturing Index presents overall business conditions of the large manufacturing companies in Japan was released by the Bank of Japan. The forecast was of no change from 12 in the second quarter of 2015. However, the outcome was above the forecast, as the Japanese Tankan Large Manufacturing Index came in at 15.

Overall, the data was on the positive side, and might help the Japanese Yen to gain traction. Let us see whether the USDJPY pair can manage to close the opening week gap or not moving ahead.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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