Key Highlights
- USD/JPY remained well bid above the 109.35 support zone.
- A key contracting triangle is forming with resistance near 109.95 on the 4-hours chart.
- EUR/USD extended its decline below the 1.1700 support zone.
- GBP/USD settled below 1.3800 and declined below the 1.3720 support.
USD/JPY Technical Analysis
The US Dollar declined sharply from 110.80 against the Japanese Yen. USD/JPY remained stable above 109.00 and it is now attempting a fresh upside break.
Looking at the 4-hours chart, there was a decent increase above the 109.50 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours). However, the pair failed to clear the 110.20 resistance.
There is also a key contracting triangle forming with resistance near 109.95. If there is an upside break above the triangle resistance, the pair could rise steadily above the 110.00 zone.
The next major resistance is near 110.20, above which the pair could revisit the 110.80 resistance zone. Any more gains may possibly lead the pair towards 111.50.
On the downside, the pair is likely to remain stable above 109.35. A downside break below 109.35 could spark a sharp decline. The next major support is near the 108.80 level.
Looking at EUR/USD, the pair traded below the 1.1700 support and it even tested 1.1665. Similarly, GBP/USD extended losses below the 1.3700 level.
Economic Releases
- UK Retail Sales for July 2021 (YoY) – Forecast +6%, versus +9.7% previous.
- UK Retail Sales for July 2021 (MoM) – Forecast +0.4%, versus +0.5% previous.
- Canadian Retail Sales for July 2021 (MoM) – Forecast +4.4%, versus -2.1% previous.
- Canadian Retail Sales ex Autos for July 2021 (MoM) – Forecast +4.6%, versus -2% previous.
