USD/JPY Forecast — US Dollar Could Decline Further Vs Japanese Yen
- - The US Dollar corrected higher recently, but it faced resistance near 111.20 against the Japanese Yen.
- - There is a key bearish trend line in place with resistance at 111.08 on the hourly chart of the USD/JPY pair.
- - Recently in Japan, the Gross Domestic Product report for Q2 2018 was released by the Cabinet Office.
- - The outcome was around the market forecast as the GDP increased 0.7% in Q2 2018 (QoQ).
Japan’s Gross Domestic Product
Recently in the US, the Gross Domestic Product report for Q2 2018 was released by the Cabinet Office. The market was positioned for a rise of around 0.7% in the GDP in Q2 2018 compared with the previous quarter.
The actual result was around the market forecast as the GDP increased 0.7% in Q2 2018. This was much better than the last reading of 0.5%. Looking at the annual change, there was a rise of 3% in the GDP, better than the forecast of 2.6% and much more than the last 1.9%.
The USD/JPY pair recently struggled to break the 111.20 resistance area and it seems like it could decline in the short term.
USD/JPY Technical Analysis
The US Dollar formed a top this past week around the 111.75 level and declined against the Japanese Yen. The USD/JPY pair fell, broke a major bullish trend line with support at 111.25 and traded below the 110.50 support area.
The pair traded as low as 110.37 and settled below the 100 hourly simple moving average. Later, the pair started an upside correction and moved above the 111.00 level plus the 50% Fib retracement level of the last decline from the 111.75 high to 110.37 low.
However, the pair faced a strong resistance near the 111.20 level and a key bearish trend line with current resistance at 111.08 on the hourly chart. Moreover, the 61.8% Fib retracement level of the last decline from the 111.75 high to 110.37 low acted as a resistance.
The pair failed to gain traction and moved down below 111.05. It seems like buyers are struggling to gain traction, which could result in more losses towards 111.80 or 110.65 in the near term. On the flip side, a break above 111.20 may push the pair towards 111.50.
Originally published at ForexGator.com.