USD/JPY – US Dollar Remains In Trouble Vs Japanese Yen
Aayush Jindal
Key Highlights
The US Dollar moved down against the Japanese and traded below the 110.50 support area.
There is a major bearish trend line formed on the 4-hours chart of USD/JPY at 110.70.
Today in Japan, the Gross Domestic Product for Q1 2017 released by the Cabinet Office posted an increase of 0.3%, less than the forecast of 0.6%.
In terms of the yearly change, the Gross Domestic Product for Q1 2017 grew 1%, less than the forecast of 2.4%.
USDJPY Technical Analysis
The US Dollar struggled a lot against the Japanese Yen, and traded below the key supports levels like 111.00 and 110.50. More declines are likely in USD/JPY in the near term with possible corrections towards 110.70.The 4-hours chart of USD/JPY clearly shows an important support break at 110.50. The same level may now act as a resistance and prevent gains above 111.00.There is also a major bearish trend line formed on the 4-hours chart at 110.70. It coincides with the 50% Fib retracement level of the last decline from the 111.71 high to 109.11 low.Any corrections towards the 110.50 or 110.70 levels are likely to face a lot of selling pressure. Furthermore, the 100 simple moving average (H4) is also waiting on the upside at 111.05 to act as a barrier.On the downside, the 109.20-10 area is a major support and likely to hold losses in the short term.
Japan’s GDP
Today in in Japan, the Gross Domestic Product for Q1 2017 was released by the Cabinet Office. The market was aligned for an increase of 0.6%, compared with the previous quarter.However, the result was a lot lower, as the increase was 0.3%. Looking at the yearly change, the forecast was aligned for an increase of 2.4%, but the GDP grew by only 1%. The GDP Deflator was forecasted to decrease by 0.8% in Q1 2017, compared with the same quarter a year ago. The outcome was as expected, as the GDP Deflator came in at -0.8%.Overall, the market sentiment is currently favoring declines in the Japanese Yen, which could lift USD/JPY towards 110.50. However, the pair is likely to face many hurdles on the upside, starting with 110.50 up to 111.10.We should also keep an on the UK election, as it may impact the market sentiment for British Pound, US Dollar and Japanese Yen. Any risk aversion scenario may prompt heavy selling in USD/JPY towards 109.00.
The 4-hours chart of USD/JPY clearly shows an important support break at 110.50. The same level may now act as a resistance and prevent gains above 111.00.There is also a major bearish trend line formed on the 4-hours chart at 110.70. It coincides with the 50% Fib retracement level of the last decline from the 111.71 high to 109.11 low.Any corrections towards the 110.50 or 110.70 levels are likely to face a lot of selling pressure. Furthermore, the 100 simple moving average (H4) is also waiting on the upside at 111.05 to act as a barrier.On the downside, the 109.20-10 area is a major support and likely to hold losses in the short term.