Key Highlights
- The US Dollar succeeded in holding the 112.00 support against the Japanese Yen, and moved higher.
- The USD/JPY pair is approaching a major bearish trend line with current resistance at 113.10 on the 4-hours chart.
- The 113.10, 113.50 and 113.80 levels are major upside barriers for buyers in the near term.
- The US ADP Employment Change in Dec 2017 registered an increase of 250K, more than the forecast of 190K.
USDJPY Technical Analysis
The US Dollar remained above the 112.00 support area in 2017 against the Japanese Yen. The USD/JPY pair is currently moving higher towards a major resistance zone of 113.50-114.00.
Looking at the 4-hours chart, it seems like the pair is trading in a broad range of 112.00-114.00. It found strong bids around the lower end of the range at 112.00, but at the same time struggled to break the 113.50-114.00 resistance zone.
Recently, the pair bounced from the 112.00 support and moved above the 23.6% Fib retracement level of the last drop from the 113.63 high to 112.05 low. It also succeeded in clearing the 200 (green) simple moving average and 112.50 resistance.
However, there are many barriers on the upside such as 113.10, 113.50 and 113.80. There is also a major bearish trend line with current resistance at 113.10 on the same chart. Just below the trend line, the 61.8% Fib retracement level of the last drop from the 113.63 high to 112.05 low is positioned at 113.03 to act as a key barrier for the US Dollar buyers.
Therefore, an upside break above 113.10 won’t be easy. Above the mentioned 113.10 resistance, the next major hurdle for USD/JPY sits around the range highs at 113.60-113.80.
On the downside, an initial support is near 112.20 followed by the range low at 112.00. The pair may continue to trade in a range before making the next major move.
US ADP Employment Change
Recently, the US saw a major release in the form of the December 2017 ADP Employment Change. The market was looking for a change of 190K, but the actual was better. According to the data release, there was a rise of 250K jobs in December 2017, up from the last revised reading of 185K.
The market sentiment improved for the US Dollar, but USD/JPY faces many challenges on the upside.
