Key Highlights
- USD/JPY started a fresh increase above the 110.00 resistance zone.
- It broke a major bearish trend line with resistance near 109.65 on the 4-hours chart.
- EUR/USD is likely to extend its decline below 1.1700.
- Gold price is recovering higher, but it is facing hurdles near $1,760.
USD/JPY Technical Analysis
The US Dollar formed a support base above the 108.80 level and started a fresh increase against the Japanese Yen. USD/JPY broke the 110.00 resistance to move into a positive zone.
Looking at the 4-hours chart, the pair broke a major bearish trend line with resistance near 109.65. It even settled nicely above the 110.00 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Finally, the pair traded to a new monthly high at 110.80 before starting a downside correction. It corrected below the 110.50 level.
USD/JPY tested the 23.6% Fib retracement level of the upward move from the 108.72 swing low to 110.80 high. The first major support is near the 110.20 level and the 200 simple moving average (green, 4-hours).
The next major support is near 110.00 and the 100 simple moving average (red, 4-hours). The main support could be near 109.75 since is coincides with the 50% Fib retracement level of the upward move from the 108.72 swing low to 110.80 high.
An immediate resistance on the upside is near the 110.65 level. The next key resistance could be 110.80, above which the pair could start a steady increase towards 111.50.
Looking at EUR/USD, the pair struggled to recover and it might resume its decline below the 1.1700 level. Similarly, GBP/USD could extend losses if it fails to stay above 1.3750.
Economic Releases
- US Import Price Index for July 2021 (MoM) – Forecast +0.6%, versus +1.0% previous.
- US Export Price Index for July 2021 (MoM) – Forecast +0.8%, versus +1.2% previous.
