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USD/JPY Surges Above 113.00, Remains in Uptrend

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Aayush Jindal

Key Highlights

  • The US Dollar made a nice upside move and traded above the 113.00 resistance against the Japanese Yen.
  • There was a break above a major ascending channel with resistance at 113.20 on the 4-hours chart of USD/JPY.
  • Tokyo’s CPI in Sep 2018 increased 1.3% (YoY), more than the forecast of 1.1%.
  • Today, the US Personal Income for August 2018 will be released, which is forecasted to increase 0.4% (MoM).

USDJPY Technical Analysis

The US Dollar started a solid upward move from the 112.56 low against the Japanese Yen. The USD/JPY pair rallied above the 113.00 resistance and traded close to 113.70.

USDJPY Technical Analysis US Dollar Japanese Yen

Looking at the 4-hours chart, the pair clearly remains in a solid uptrend above the 113.00 level and the 200 simple moving average (green, 4-hours). During the upside, there was a break above a few important resistances like 113.25 and 113.40.Moreover, there was a break above a major ascending channel with resistance at 113.20 on the 4-hours chart. The pair traded as high as 113.63 and it is currently consolidating above 113.40.On the downside, an initial support is the 23.6% Fib retracement level of the last wave from the 112.56 low to 113.63 high. Below 113.40, the pair may test the next major support at 113.00.An intermediate support is 113.10 and the 50% Fib retracement level of the last wave from the 112.56 low to 113.63 high. On the upside, a break above the recent high could push the pair towards 114.00.Fundamentally, Tokyo’s CPI report for Sep 2018 was released earlier today. The market was looking for a rise of 1.1% in the CPI in Sep 2018 compared with the same month a year ago.However, the result was positive as the CPI increased 1.3%. Looking at the Tokyo CPI ex Fresh Food, there was a rise of 1.0%, more than the forecast of 0.9% (YoY).Therefore, there could be a minor dip in USD/JPY towards the 113.40 or 113.10 support before buyers appear again.

Economic Releases to Watch Today

  • US Personal Income for August 2018 (MoM) - Forecast +0.4%, versus +0.3% previous.
  • UK GDP for Q2 2018 - Forecast +0.4% (QoQ) versus +0.4% previous.
  • Euro Zone CPI for Sep 2018 (YoY, Preliminary) - Forecast +2.5%, versus +2.0% previous.
  • Euro Zone Core CPI for Sep 2018 (YoY, Preliminary) - Forecast +1.1%, versus +1.0% previous.
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