USD/JPY once again found a support around the long term trendline support on Friday and consolidated around the key support area ahead of Japan’s GDP report which is due next week. The trend remains bearish due to Lower High (LH) in the recent upward wave.
As of this writing, the pair is being traded near 101.78. A support can be seen around 101.55 that is the lower trendline of the triangle as demonstrated in the following chart. A break and daily closing below the trendline shall stir renewed selling interest, opening doors for a dip below the 100.00 milestone.
On the upside, the pair is likely to face a hurdle near 102.00 that is the 38.2% fib level and psychological number ahead of the channel resistance which is currently sitting in around 102.74, a daily closing above the channel resistance will turn the sentiment to bullish, validating a rally towards the 103.30 resistance area.
First Quarter Growth
On Wednesday, the Cabinet Office of Japan will release the first quarter Gross Domestic Product (GDP) report. According to the median projection of various economists, the Japanese economy grew at 4.5% during the first quarter compared with 0.7% in the same quarter of the year before. Similarly, the economy grew at 1.12% in the first quarter as compared to 0.2% in the quarter before, the forecast added. Better than expected actual figures will be considered bearish for USD/JPY and vice versa
Considering the overall macro-economic scenario and technical outlook, selling the pair on a daily closing below the trendline could yield favorable results, the trade should however be closed down on a daily closing back above the trendline; the target may be around 100.00.