- The USD / JPY is struggling to climb above the resistance of 109.40.
- The pair could extend further decline if it breaks the 108.00 support.
- Initial US unemployment claims for the week ending April 04, 2020 have increased from 6,867K to 6,606K.
- The American consumer price index should fall by 0.3% in March 2020 (MoM).
Technical analysis USD / JPY
After testing the 107.00 support area, the US dollar rose above the 108.00 pivot level against the Japanese yen. However, the USD / JPY is struggling to climb above the resistance of 109.40.
Looking at the 4 hour chart, the pair recently tested the resistance range of 109.40 and the 50% retracement level of the key drop from its high of 111.68 to 106.91.
The bulls struggled to push the pair above 109.40, which resulted in a bearish reaction below the simple moving average of 100 (red, 4 hours). In addition, there was a break under a short-term contraction triangle with support at 108.75.
On the downside, there is key support forming near the 108.00 level and 200 simple moving averages (green, 4 hours). If the pair fails to stay above 108.00, it could extend further down to support levels 107.00 and 106.50.
Conversely, a successful break above the resistance level of 109.40 could set the pace for a sharp rise in the next sessions towards 110.00 and 111.00.
Basically, the number of initial U.S. unemployment claims for the week ending April 04, 2020 has been released by the U.S. Department of Labor. The market was looking for a drop in last reading from 6648K to 5252K.
The actual result was disappointing, as initial unemployment claims in the United States reached $ 6,606,000. In addition, the last reading has been revised from 6648K to 6867K.
The report adds:
The 4-week moving average was 4,265,500, an increase of 1,598,750 from the previous week’s revised average. The previous week’s average was revised up 54,750 from 2,612,000 to 2,666,750.
Overall, the USD / JPY remains exposed to the risk of additional losses if it breaks the support of 108.00. Conversely, EUR / USD and GBP / USD show positive signs above 1.0850 and 1.2400 respectively.
Upcoming economic releases
- March 2020 Consumer Price Index for the United States (MoM) – Forecast -0.3%, compared with + 0.1% previously.
- Consumer Price Index in the United States March 2020 (YoY) – Forecast of + 1.6%, against + 2.3% previously.
- Consumer Price Index in the United States excluding food and energy March 2020 (year-on-year) – Forecast + 2.3%, compared with + 2.4% previously.