USD/JPY Exposes to Risk of Further Decline, 131.54 is a Strong Support

Key Take-Aways

  • A new decline in the USD/JPY began below the 135.00 support area.
  • On the 4-hours chart, a connecting negative trend line is developing with resistance close to 134.20.
  • Above the 1.2300 resistance level, the GBP/USD pair hopes to advance further.
  • In Q2 2022 (QoQ), the UK GDP could decline by 0.2%. (Prelim).

Technical Analysis of USD/JPY

The US Dollar’s significant drop versus the Japanese Yen began well above the 138.00 mark. The USD/JPY fell below the 135.00 support level and entered a negative area.

The pair fell below the 132.00 level on the 4-hours chart before finding support close to the 130.40 level. Above the 132.00 mark, there was an upward correction last week.

The price of the pair increased above 134.00, but it continued to trade below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours). On the same chart, a connecting negative trend line with resistance close to 134.20 is also developing.

The first significant support for the downside is close to the 131.75 level. Now, the 130.50 level is establishing the main support. Losses can increase if the 130.50 support level is broken downward.

The next significant support is close to the 130.00 mark. Any more losses might push the pair closer to the 128.00 level. The pair is encountering resistance near the 133.75 level on the upswing. The trend line and the 134.40 level serve as the next significant resistance.

The pair may advance higher toward the 136.00 level if there is a clear rise over the trend line resistance. It could drive gains higher if they can break through 136.80, the next significant obstacle. In the aforementioned scenario, the pair may advance in the near term toward the 138.00 resistance region.

Regarding the GBP/USD pair, it continued to trade well above the 1.2100 level and appears to be looking for a respectable advance above the 1.2300 resistance area.

Economic News to Trade Today

Q2 2022 UK GDP (QoQ) (Preliminary):  Forecast -0.2%, versus +0.8% previous.

Amogo Solomon is a Broker-Dealer/Market Research analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics, and Forex Broker Dealing. He specializes in Forex Dealing, markets Analysis, Currency research, forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.