Key Highlights
- The US Dollar recovered slightly this week against the Japanese Yen, but upsides were capped by 107.60.
- There is a major resistance zone forming near 107.60 on the 4-hours chart of USD/JPY.
- The US Initial Jobless Claims figure for the week ending Feb 24, 2018 posted a decline from the last revised reading of 220K to 210K.
- Tokyo’s Consumer Price Index ex Food and Energy increased 0.9% in Feb 2018 (YoY), more than the forecast of 0.8%.
USDJPY Technical Analysis
The US Dollar recovered above 107.50 this week against the Japanese Yen. However, the USD/JPY pair failed to retain gains and declined back below the 107.00 support.
It seems like the pair failed to break a major resistance zone near 107.60-80 and started a downside move. However, the pair is still above the 106.00 support area, which is a positive sign.
Looking at the 4-hours chart, it looks like the recent failure was near a bearish trend line with current resistance at 107.20. Moreover, there is a declining channel forming with resistance at 107.40. Lastly, the 100 simple moving average (red, 4-hour) is positioned near 107.45.
Therefore, it seems like there is a crucial upside barrier forming around 107.50. A break and close above 107.50 could open the doors for a push towards the next major resistance at 108.50.
On the downside, the 106.00-106.10 region is a key support. If the pair fails to stay above 106.00, it could move back in the bearish zone.
Recently in the US, the Initial Jobless Claims figure for the week ending Feb 24, 2018 was released by the US Department of Labor. The market was looking for a rise from the last reading of 222K to 226K.
The actual result was on the positive side, as there was a decline in the claims to 210K. Moreover, the last reading was revised down to 220K.
The overall market sentiment is slightly negative for the US Dollar. Pairs such as EUR/USD and GBP/USD were seen recovering above key resistance levels.
Economic Releases to Watch Today
- German Retail Sales for Jan 2018 (YoY) – Forecast +3.5%, versus -1.9% previous.
- UK’s Construction PMI for Feb 2018 – Forecast 50.5, versus 50.2 previous.
- Canadian GDP for Q4 2017 (Annualized) – Forecast +2.0%, versus +1.7% previous.
- BOE’s Governor Carney speech.
