USD/JPY Threatens Long Term Triangle Formation

FXOpen

The US Dollar (USD) extended downside movement against the Japanese Yen (JPY) on Thursday, threatening the long term triangle formation on the daily chart. The sentiment remains neutral; a breakout through the triangle will provide clear direction to the pair.

Technical Analysis

As of this writing, USD/JPY pair is being traded near 101.73. A support can be noted around 101.40, the lower trendline channel as demonstrated in the following chart. A break and daily closing below the trendline support could spur a renewed selling pressure, validating a dip towards the 100.00 milestone.

usdjpy-d1-capital-trust-markets[1]

On the upside, the pair is expected to face a hurdle near 102.07, the 61.8% fib level ahead of 102.33, the trendline resistance. A daily closing above the channel resistance will validate fresh rallies above the 103.00 handle.

Japan Inflation

The Ministry of Internal Affairs & Communications will release the Japan’s inflation report tomorrow. According to the median projection of different economists, the inflation remained 2.6% in May as compared to 3.4% in the same month of the year before. Generally speaking, higher inflation is considered positive for the developed economies like Japan, so a worse than expected actual outcome will be seen as bullish for USD/JPY and vice versa.

Unemployment Rate

Japanese government will also release the unemployment rate figure tomorrow. According to the average forecast of various analysts, the rate of unemployment in Japan remained 3.6% in May as compared to the same rate in the month before, better than expected actual outcome will be seen as bearish for USD/JPY and vice versa.

Conclusion

Keeping in view the overall technical and fundamental outlook, buying or selling the pair on a breakout through the daily triangle formation appears to be a good strategy in the long run, the trade should however be stopped out on a daily closing back inside the triangle as described above.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: US Currency Continues to Grow Ahead of GDP Data Release Market Analysis: Gold and Commodity Currencies Resume Their Decline Market Analysis: EUR/USD Takes Hit While USD/CHF Surges Market Analysis: The Yen and European Currencies Headed to New Lows Market Analysis: US Federal Reserve Contemplates Future Interest Rate Hikes Amid Economic Resilience

Latest articles

Financial Market News

US Government Shutdown: Assessing Economic Impact and Recession Risks

The recurring spectre of a government shutdown has once again loomed over the United States, prompting concerns about its potential economic consequences. The shutdown may occur this weekend unless lawmakers agree on spending levels and whether to give more aid

Indices

S&P 500 Analysis: Price Reaches The Edge of Abyss

Investors in the US stock market have serious reasons to worry: → The likelihood of a shutdown of government agencies is becoming more and more real. It could happen as early as next week if a budget agreement is not reached

Cryptocurrencies

Bitcoin Cash Analysis: Promising Resistance Breakout

Yesterday, the head of the SEC regulator, Gary Gensler, answered questions for 4 hours before the Financial Services Committee of the US House of Representatives, which, among other things, related to cryptocurrencies. What has become known: → on the eve of

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.