Key Highlights
- The US Dollar found support after trading as low as 110.19 against the Japanese Yen.
- There was a break above a short-term bearish trend line with resistance at 111.15 on the 4-hours chart of USD/JPY.
- The pair faces many resistances on the upside at 111.80 and 112.00.
- The US Building Permits in Dec 2017 declined by 0.1%, less than the forecast of -1.0%.
USDJPY Technical Analysis
The US Dollar was under pressure this week as it traded below the 110.50 level against the Japanese Yen. The USD/JPY pair is now recovering and is showing positive signs from the 110.19 low.
The pair has moved above the 23.6% Fib retracement level of the last decline from the 113.38 high to 110.19 low. More importantly, there was a break above a short-term bearish trend line with resistance at 111.15 on the 4-hours chart.
The upside move was stalled near the 111.40 level and the 38.2% Fib retracement level of the last decline from the 113.38 high to 110.19 low. A proper break above the 111.40-50 levels is needed for buyers to step up the momentum.
The next major resistances on the upside are 111.80 and 112.00, but a break above the mentioned levels won’t be easy. On the downside, the pair is likely to find support at 110.80. Should there be more declines below 110.80, the pair could accelerate back towards the last low of 110.19.
Technically, indicators are showing positive signs on the 4-hours chart of USD/JPY. Having said that the pair has to move past 111.50 and 111.80 to keep the momentum intact.
Recently, the US saw the release of the Building Permits Change figure for Dec 2017 by the US Census Bureau. The forecast was slated for a decline of 1%, but the actual was a bit lower as the decline was 0.1%.
On the other hand, the Housing Starts Change posted a decline of 8.2%, which was much higher than the forecast of -1.7%. The US Dollar declined after the release, and USD/JPY tested the 110.80 support area.
Other majors such as EUR/USD started a fresh upside wave and moved above 1.2220. GBP/USD also moved higher towards the 1.3900 level.
