Key Highlights
- USD/JPY is facing a major resistance near the 114.00 zone.
- It cleared a contracting triangle with resistance near 113.45 on the 4-hours chart.
- EUR/USD is struggling to clear the 1.1350 resistance zone.
- Gold price could extend decline if it settles below $1,760.
USD/JPY Technical Analysis
The US Dollar started a major decline from well above 115.20 against the Japanese Yen. USD/JPY traded below 115.00 and 114.50 before it found support near 112.50.
Looking at the 4-hours chart, the pair traded as low as 112.53 and recently started an upside correction. There was a break above the 113.00 resistance level, but it is still well below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
There was a break above a contracting triangle with resistance near 113.45 on the same chart. However, the pair is now facing a strong resistance near the 114.00 level.
It is near the 100 simple moving average (red, 4-hours), and the 50% Fib retracement level of the downward move from the 115.52 swing high to 112.53 low.
A clear break above the 114.00 and 114.05 resistance levels could open the doors for a steady upward move. If not, there could be a fresh decline below the 113.00 support. The next major support is near the 112.50 level, below which the pair could decline heavily.
Looking at EUR/USD, the pair is facing a strong resistance near the 1.1350 level. Besides, GBP/USD could extend losses below the 1.3200 support zone.
Economic Releases
- German Consumer Price Index for Nov 2021 (YoY) – Forecast +5.2%, versus +5.2% previous.
- German Consumer Price Index for Nov 2021 (MoM) – Forecast -0.2%, versus -0.2% previous.
- UK GDP for Oct 2021 (MoM) – Forecast +0.4%, versus +0.6% previous.
- US Consumer Price Index for Nov 2021 (MoM) – Forecast +0.7%, versus +0.9% previous.
- US Consumer Price Index for Nov 2021 (YoY) – Forecast +6.8%, versus +6.2% previous.
- US Consumer Price Index Ex Food & Energy for Nov 2021 (YoY) – Forecast +4.9%, versus +4.6% previous.
