Key Highlights
- USD/JPY is rising and it is trading above the 108.00 resistance.
- A crucial bearish trend line was breached with resistance near 106.00 on the 4-hours chart.
- EUR/USD and GBP/USD remained in a bearish zone below 1.0850 and 1.1800 respectively.
- The US Existing Home Sales could increase 0.7% in for Feb 2020 (MoM).
USD/JPY Technical Analysis
Earlier this month, the US Dollar dived towards the 101.00 level against the Japanese Yen. USD/JPY traded as low as 101.18 and recently started a strong increase above 104.00 and 106.00.
Looking at the 4-hours chart, the pair gained strength above the 107.20 resistance level to move into a positive zone. The pair even climbed above the 50% Fib retracement level of the last key decline from the 112.22 high to 101.18 low.
Besides, there was a close above the 108.00 barrier, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
It is now trading above the 61.8% Fib retracement level of the last key decline from the 112.22 high to 101.18 low. Therefore, there are high chances of more upsides above the 110.00 barrier in the coming sessions.
The next key resistance is near the 111.80 and 112.00 resistance levels. If there is a downside correction, the pair could find support near the 108.00 level. The main support is now near the 107.20 level and the 100 SMA.
Fundamentally, the US Initial Jobless Claims figure for the week ending March 14, 2020 was released by the US Department of Labor. The market was looking for an increase from 211K to 220K.
The actual result was disappointing, as the US Initial Jobless Claims increased from 211K to 281K, which is more than 50K increase in claims.
The report stated:
The 4-week moving average was 232,250, an increase of 16,500 from the previous week’s revised average. This is the highest level for this average since January 27, 2018 when it was 234,500. The previous week’s average was revised up by 1,750 from 214,000 to 215,750.
Overall, USD/JPY is showing signs of more upsides towards the 111.50 and 112.00 levels. Conversely, both EUR/USD and GBP/USD are now trading in a major downtrend below 1.0850 and 1.1800 respectively.
Upcoming Economic Releases
- Canadian Retail Sales Jan 2020 (MoM) – Forecast +0.3%, versus 0% previous.
- US Existing Home Sales for Feb 2020 (MoM) – Forecast +0.7%, versus -1.3% previous.
