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USD/JPY – Can US Dollar Hold 110.50 Vs Japanese Yen?

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Aayush Jindal

Key Highlights

  • The US Dollar is under a lot of selling pressure and trading below 111.50 against the Japanese Yen.
  • There is a connecting bullish trend line with support at 110.80 forming on the 4-hours chart of USD/JPY.
  • Today in Japan, the National Consumer Price Index for June 2017 was released, which posted an increase of 0.4% (YoY).
  • The Japanese Unemployment Rate for June 2017 was down from 3.1% to 2.8%.

USDJPY Technical Analysis

The US Dollar after trading as high as 114.48 against the Japanese Yen earlier this month faced selling pressure. The USD/JPY declined during the past few weeks and currently testing a major support near 110.50.

USDJPY Technical Analysis US Dollar Japanese Yen

The pair declined below the 112.00 support and the 100 simple moving average (H4). A low was formed near 110.60 before the pair started correction higher. There is a connecting bullish trend line with support at 110.80 forming on the 4-hours chart.

The trend line support may play a significant role for the next move either below 110.60-50 or above 111.50. On the upside, two bearish trend lines and 100 SMA near 111.50-80 could act as a crucial barrier for buyers in the near term.

If buyers fail to hold the trend line support at 110.80, there is a chance of USD/JPY testing the 1.236 extension level of the last wave from the 110.62 low to 112.20 high.

Japan’s National Consumer Price Index and Unemployment Rate

Today, there were a few key economic releases in Japan for June and 2017 such as the National CPI and Unemployment Rate. The National Consumer Price Index for June 2017 was released by the Statistics Bureau.

The market was looking for an increase of 0.4% in the CPI compared with the same month a year ago. The actual result was similar, and even the Core CPI came in at 0.4%, just as the market expected.

However, the Tokyo Consumer Price Index ex Fresh Food (Core) posted a better than expected increase of 0.2% for June 2017, compared with the same month a year ago.

Another important release was the Unemployment Rate for June 2017 from the Ministry of Health, Labor and welfare, which was published by the Japan Statistics Bureau.

The forecast was a decline from 3.1% to 3%. However, the actual result was much better, as the unemployment rate decreased to 2.8% in June 2017.

Overall, the results were positive for the Japanese Yen, and might put pressure on USD/JPY as long as the pair is below 111.50. Should there be a close below 110.60, the pair could retest 110.00.

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