USD/JPY Technical & Fundamental Outlook

Usman Ahmed -

USD/JPY yesterday pulled back sharply after finding support at 102.00 (trendline support). At the moment in Asian session, spot is around 102.56.

Major Support & Resistance Levels

The pair is likely to find an immediate support at 102.11 (trendline support), ahead of 102.05 (hourly 200 MA) and then 101.98 (55 MA on 4 hour chart). A break below this support area may extend downtrend up to 101.04 (100 MA on 4 hour chart) and finally 99.66 (200 MA on 4 hour chart + 50% fib level of recent drop).

On upside, immediate resistance is seen at 103.37 (yesterday’s high, 38.2% fib level of last major move also sits near this area), a break above this level may push USD/JPY into relatively strong bullish momentum that may lead price up to 105.05 (61.8% fib level).

Technical Indicators

Moving averages are showing bullish crossover of 55 DMA and 200 DMA which is a very strong indication of upward trend. MACD is also showing bullish crossover in hourly chart but negative divergence can also be found at 4 hour chart which suggests bulls are getting weaker with the passage of time. Relative Strength Index (RSI) is neutral with 50 reading while Bollinger bands are showing support and resistance levels at 99.04 and 103.16 respectively on daily timeframe.

Daily Fundamentals

Japanese basket is empty today, however a few important economic reports about American economy are due later in the US session those include:

  • MBA Mortgage Applications (Nv 29): previous reading -0.3%
  • ADP Employment Change (Nov): Previous 130K, Forecast 173K
  • US Trade Balance for Oct: Previous $41.78 B, Forecast $40.00B
  • ISM Non-Manufacturing PMI (Nov): Previous 55.4, Forecast 55.0                   
  • New Home Sales (MoM) (Oct):  Previous 0.421M, Forecast 0.432M                
  • New Home Sales (MoM) (Sep):  Previous 0.421M, Forecast 0.427M

Better than expected economic reports may accelerate the ongoing bullish trend in US Dollar Index and vice versa.