The US Dollar rocketed higher during the past few weeks against the Japanese yen to trade above 115.00.
The weekly chart of USDJPY suggests that the pair is reaching a major resistance area near 119.00-120.00.
There is a monster bearish trend line and resistance area formed near 119.00-120.00.
Today, the US Gross Domestic Product Annualized reading will be released by the US Bureau of Economic Analysis, which is forecasted to increase by 3.3% in Q3 2016.
USDJPY Technical Analysis
The US Dollar after making a major low in June 2016 at 99.00 against the Japanese yen traded higher. The USDJPY pair registered solid gains and now reaching a major resistancearea near 119.00-120.00.Looking at the weekly chart of USDJPY, there is a monster connecting bearish trend line positioned near 119.50. Moreover, the 76.4% Fib retracement level of the last decline from the 125.85 high to 99.05 low is also around the same trend line.Lastly, the same area was a pivot zone for the pair earlier. So, it looks like the pair may face a lot of offers near the highlighted resistance area. A break above it won’t be easy. On the downside, the 100-week simple moving average is aligned at 115.00 to act as a support area if the pair corrects lower. The weekly RSI is well above the 50 level, which is a positive sign for USDJPY in the near term.On the other hand, a break above 120.00 may open the doors for a move towards 125.00 in the medium term.
US Gross Domestic Product
Later during the NY session, there is a major release in the US. The Gross Domestic Product, which shows the monetary value of all the goods, services and structures produced will be reported by the US Bureau of Economic Analysis.The market is positioned for a growth rate of 3.3% in Q3 2016 (annualized), which is more than the last 3.2%. If the result meets the forecast, there is a chance of the greenback attempting a break above the highlighted resistance area.On the other hand, a lower reading may call for a correction in USDJPY. In that case, the pair may correct lower towards the 115.50-00 support area.
Looking at the weekly chart of USDJPY, there is a monster connecting bearish trend line positioned near 119.50. Moreover, the 76.4% Fib retracement level of the last decline from the 125.85 high to 99.05 low is also around the same trend line.Lastly, the same area was a pivot zone for the pair earlier. So, it looks like the pair may face a lot of offers near the highlighted resistance area. A break above it won’t be easy. On the downside, the 100-week simple moving average is aligned at 115.00 to act as a support area if the pair corrects lower. The weekly RSI is well above the 50 level, which is a positive sign for USDJPY in the near term.On the other hand, a break above 120.00 may open the doors for a move towards 125.00 in the medium term.