Key Highlights
- The US Dollar recovered recently, but it failed to move above the 107.90 resistance against the Japanese Yen.
- There is a major bearish trend line forming with current resistance at 107.40 on the 4-hours chart of USD/JPY.
- The pair is under bearish pressure and it may perhaps retest the 106.00 support.
- The US Initial Jobless Claims for the week ending Feb 17, 2018 declined from the last revised reading of 229K to 222K.
USDJPY Technical Analysis
Earlier this week, the US Dollar started a recovery and moved above 107.00 against the Japanese Yen. However, the USD/JPY pair could not break the 107.90-108.00 resistance and moved down.
Looking at the 4-hour chart, the pair failed to trade above a major bearish trend line with current resistance at 107.40. The pair traded as high as 107.94 and is currently moving lower.
It traded below the 23.6% Fib retracement level of the last wave from the 105.54 low to 107.94 high. It seems like the pair is under pressure and it could extend the current downside move.
It already tested the 50% Fib retracement level of the last wave from the 105.54 low to 107.94 high. Therefore, if it breaks the 106.70 support level, it could move back towards the 106.00 support.
On the upside, an initial resistance is around 107.20. However, the most important hurdle for buyers is near the bearish trend line with current resistance at 107.40. As long as the pair is below 107.40, it may remain in a negative zone.
Recently, the US Initial Jobless Claims for the week ending Feb 17, 2018 was released by the US Department of Labor. The market was looking for no change in the claims from 230K.
However, the actual result was better, as there was a decline in claims to 222K. Moreover, the last reading was revised down to 229K.
The report added:
The previous week’s level was revised down by 1,000 from 230,000 to 229,000. The 4-week moving average was 226,000, a decrease of 2,250 from the previous week’s revised average. The previous week’s average was revised down by 250 from 228,500 to 228,250.
Overall, the US Dollar seems to be struggling to gain upside momentum. USD/JPY must break the 107.40 level to start a fresh upside recovery.
