The Japanese yen strengthened yesterday, first on a weaker US dollar, and later on the yen was boosted by positive local data. USD/JPY reversed the bullish cycle as US dollar index plunged 101.18, not long before dropping from 101.60 yesterday highs. Yesterday, the pair clocked a high at 112.78, and as the greenback weakened, USD/JPY retreated to 111.34 low.
The pair received another negative shock, which resulted in an extension of bearish momentum as Japanese house hold spending scored -0.4% compared to -2.1% in previous sessions. A less impact news with retail sales resulting in -0.1% compared to -1.7% previous session, and forecasts at -1.5%. Unemployment rate was left unchanged at 3.0%, resulting in top performance for USD/JPY in Asian markets. USD/JPY currently trading at 112.05 (below Weekly Pp), after sinking to 111.61 low, and rallied to 112.24 high, US index currently 101.34 intraday.
Although the pair made a short-term-downswing-correction resulting in bearish momentum as the dollar takes a break after a strong move, it still remains under the mercy of relatively strong US dollar awaiting Prelim GDP scheduled at 1:30 PM GMT, and later on Consumer confidence at 3:00 PM GMT. USD/JPY made it's first test as first support and the level was successful resulted in reverse to bullish candle sending the pair above 112 handle ahead of further economic data.
Key levels to watch: Weekly Pp 112.41
Trend: Bullish Sideways
Resistance levels: R1 112.34, R2 112.84, R3 113.33, R4 113.70
Support Levels: S1 111.61, S2 111.29, S3 110.93, S4 110.55
Remark: Overall mood of USD/JPY is still to be considered bearish, the short-term-down-correction was a result of good Japanese data. Price range between S1 and R2 but look forward for more volatility as US economic data released today which will determine the up-coming USD/JPY trend for the next hours, and days
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