Key Highlights
- USD/JPY started a downside correction below 158.80.
- It traded below a bullish trend line with support at 158.85 on the 4-hour chart.
- EUR/USD started a recovery wave and traded above 1.1550.
- Gold prices declined heavily below $5,000 and $4,850.
USD/JPY Technical Analysis
The US Dollar failed to continue higher above 159.90 against the Japanese Yen. USD/JPY corrected gains and traded below 159.00.
Looking at the 4-hour chart, the pair traded below a bullish trend line with support at 158.85. The pair even dipped below 158.00 and tested the 100 simple moving average (red, 4-hour). A low was formed at 157.50, and the pair is now consolidating losses.
It could be forming a base above 157.50 and might start a fresh increase. On the upside, the pair is now facing sellers near 158.70 and the 50% Fib retracement level of the downward move from the 159.89 swing high to the 157.50 low.
The first major resistance sits at 159.00. A close above 159.00 could open the doors for gains above 159.50. In the stated case, the bulls could aim for a move to 160.00. Any more gain might open the doors for a test of 162.00.
If there is no upside break above 159.00, the pair might start a fresh decline. Immediate support is seen near 157.65. The first key support sits at 157.50.
A close below 157.50 might call for heavy losses. In the stated case, it could even revisit 156.50 and the 200 simple moving average (green, 4-hour) in the coming days.
Looking at Gold, the price failed to stay above $5,000 and started a sharp decline toward $4,600. The main support sits at $4,500.
Upcoming Key Economic Events:
- Baker Hughes US Oil Rig Count.
- ECB’s Nagel speech.
