USDJPY – Can US Dollar Break This Vs Japanese Yen?
Aayush Jindal
Key Highlights
The US Dollar recently rejected once against around the 112.50 level against the Japanese yen, and traded higher.
The USDJPY pair broke a bearish trend line with resistance at 114.50 on the 4-hours chart.
Today, the Japanese National Consumer Price Index released by the Statistics Bureau posted an increase of 0.3% in Dec (YoY).
The Tokyo Consumer Price Index on the other hand registered a rise of 0.1% in Jan 2017 (YoY).
USDJPY Technical Analysis
The US Dollar managed to gain strength from the 112.50 low against the Japanese yen and moved higher. The USDJPY is currently trading in the bullish zone and may trade further higher.It looks like the pair was rejected once again around the 112.50 support area, which means there is a double bottom pattern formed on the 4-hours chart. The pair moved above the 50% Fib retracement level of the last decline from the 115.62 high to 112.55 low.So, there is a chance of more upsides. The pair also broke a bearish trend line with resistance at 114.50. Now, it needs to clear the 76.4% Fib retracement level of the last decline from the 115.62 high to 112.55 low, and the 100 simple moving average on the same chart.On the downside, the 114.40 and 114.00 support levels may prevent a downside move in the short term. The H4 RSI is also around the 65 level for USDJPY, which is a positive sign.
Japanese National Consumer Price Index
Today, the Japanese National Consumer Price Index report was released by the Statistics Bureau. The market was positioned for an increase of 0.4% in the CPI in Dec 2016, compared with the same month a year ago. However, the result was positive, as there was a rise of 0.5%.Moreover, the Tokyo Consumer Price Index came in at 0.1% in Jan 2017 (YoY), which was more than the last 0%. When we look at the Tokyo Core Consumer Price Index, the forecast was -0.4%, but the result was better, as the decline was -0.3%.However, it looks like the Japanese yen was not impressed, and was seen trading lower against most major currencies like the US dollar (moved higher towards 115.00).
It looks like the pair was rejected once again around the 112.50 support area, which means there is a double bottom pattern formed on the 4-hours chart. The pair moved above the 50% Fib retracement level of the last decline from the 115.62 high to 112.55 low.So, there is a chance of more upsides. The pair also broke a bearish trend line with resistance at 114.50. Now, it needs to clear the 76.4% Fib retracement level of the last decline from the 115.62 high to 112.55 low, and the 100 simple moving average on the same chart.On the downside, the 114.40 and 114.00 support levels may prevent a downside move in the short term. The H4 RSI is also around the 65 level for USDJPY, which is a positive sign.