Why USD/JPY Has Potential To Increase Gains Beyond A Multi-Year High
- Above the 136.00 resistance level, the USD/JPY began to rise once more.
- On the 4-hour chart, it broke a significant bearish trend line at 134.40.
- GBP/USD and EUR/USD are having trouble launching a comeback wave.
- US GDP fell by 0.6% in Q2 2022. (Preliminary).
Technical Analysis of USD/JPY
From the 132.00 area against the Japanese Yen, the US Dollar began to steadily rise. The USD/JPY overcame numerous obstacles between 133.50 and 134.00 to enter a bullish zone.
The pair has positioned itself above the 135.00 area, the 100 simple moving average (4-hours, red), and the 200 simple moving average, according to the 4-hours chart (green, 4-hours). At 134.40, the pair even breached a significant negative trend line.
It made room for a decent increase above the levels of 136.00 and 136.50. The pair made a high near 137.70 and traded near the 138.00 resistance.
Recently, there was a negative correction below the 137.20 mark. Even though the pair fell below 136.00, losses were minimal. Both the 135.50 support level and the 200 simple moving average were easily breached by the pair (green, 4-hours).
The pair will likely decline towards the 134.80 support and the 200 simple moving average (red, 4-hours) if it breaks the 135.50 support level.
On the contrary, the pair might gain beyond the 137.40. It is facing the 138.00 resistance on the upside. The succeeding resistance is close to the 139.40 level. A confirmed move above the 139.40 resistance might drive the pair higher towards the 140.00 level multi-year high.
Basically, the US Bureau of Economic Analysis released the US Gross Domestic Product data for Q2 2022 (preliminary). The market anticipated a 0.8% decline in GDP.
The actual outcome was better than expected, with the US GDP declining by 0.6% in Q2 2022, an increase from the previous reading of -0.9%.
When looking at EUR/USD, the pair is consolidating close to parity and may continue to decline. The GBP/USD exchange rate is still susceptible to further declines.
Economic News to Trade Today
- US Personal Income for July 2022 (MoM): forecasted to increase by 0.6% from the previous 0.6%.
- Jackson Hole Meeting
- Jerome Powell, the head of the Federal Reserve, speaks before Congress.
Author: Amogo Solomon
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