USD / JPY is likely to recover further to 111.50 / 80



Essentials

  • The US dollar found support near the support of 109.80 against the Japanese Yen.
  • There was a break under a major bullish trend line with support at 111.10 on the daily chart of USD / JPY.
  • The US initial unemployed claims for the week ending August 18, 2018, dropped from 212K to 210K.
  • Today, the US Durable Goods Orders will be released for July 2018, which is expected to decline by 0.5%.

USDJPY Technical analysis

The US dollar remained below 111.80 and 111.50 support levels under high pressure compared to the Japanese Yen. The USD / JPY pair even traded below the 110.00 level before buyers appeared in the vicinity of 109.80.

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Looking at the daily chart, the pair nestled below the 111.50 pivot level and broke a major bullish trend line with support at 111.10. However, the 100-day simple moving average (red) and the 200-day simple moving average (green) near the 110.00 level served as strong support.

It jumped back above the 110.50 level and the 23.6% Fib retracement level of the last drop from the 113.17 high to 109.77 low. On the positive side, many resistances have been formed in the vicinity of the levels 111.40 and 111.50.

In addition, the 50% Fib retracement level of the last drop from the 113.17 high to 109.77 low is also close to the 111.50 level to avoid gains. Above, the pair will probably recover to 112.00.

On the other hand, if there is a downward correction, the pair will probably find support near the 110.20 and 110.00 levels.

Recently in the US, the figure for the first unemployed claims for the week ending August 18, 2018 was released. The market was looking for a rise from the last reading of 212K to 215K.

However, the actual result was positive, as there was a decrease in the last value from 212K to 210K. The report stated:

The advancing 4-week average was 213,750, a decrease of 1,750 compared to the non-revised average of 215,500 of the previous week.

All in all, the US dollar can continue to recover in the short term compared to the Japanese yen, while EUR / USD and GBP / USD are likely to generate capital gains.

Economic results to view today

  • US Orders for durable goods for July 2018 – Forecast -0.5% versus + 0.8% previous.
  • German gross domestic product for Q2 2018 (YoY) – Forecast 2.3%, compared with 2.3% previous.
  • German gross domestic product for Q2 2018 (QoQ) – Forecast 0.5%, against 0.5% previous.


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