Key Highlights
- USD/JPY gained pace after it broke the 114.50 resistance.
- It traded above a major bearish trend line near 114.20 on the 4-hours chart.
- EUR/USD declined heavily below the 1.1220 support.
- GBP/USD extended decline below the 1.3400 support.
USD/JPY Technical Analysis
The US Dollar formed a double bottom near 113.50 against the Japanese Yen. USD/JPY started a fresh increase and cleared the 114.00 resistance zone.
Looking at the 4-hours chart, the pair gained pace above the 114.20 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Besides, there was a break above a major bearish trend line near 114.20 on the same chart. The pair climbed above the 50% Fib retracement level of the downward move from the 116.34 swing high to 113.48 low.
An immediate resistance is near the 115.80 level. It is near the 76.4% Fib retracement level of the downward move from the 116.34 swing high to 113.48 low.
Any more gains could send the pair towards the 116.30 level. The next major resistance is near the 116.80 level. If there is a downside correction, the pair could visit the 115.00 support. The next major support sits near the 114.80 level, below which it could test 114.50.
Looking at EUR/USD, the pair started a strong decline below the 1.1300 support zone. Similarly, GBP/USD nosedived below the 1.3500 level.
Economic Releases
- German Gross Domestic Product for Q4 2021 (YoY) (Preliminary) – Forecast 1.8%, versus 2.5% previous.
- German Gross Domestic Product for Q4 2021 (QoQ) (Preliminary) – Forecast -0.3%, versus 1.7% previous.
- Euro Zone Consumer Confidence for Jan 2022 – Forecast -8.4, versus -8.5 previous.
- US Personal Income for Dec 2021 (MoM) – Forecast +0.5%, versus +0.4% previous.
