USD/JPY Forecast – US Dollar Looking To Outperform Yen
- – The US Dollar after a downside wave towards 111.60 against the Japanese yen found support.
- – The USD/JPY pair started a recovery, and currently looking to break a bearish trend line at 114.00 on the 4-hours chart.
- – The Japanese Gross Domestic Product released by the Cabinet Office posted an increase of 1% in Q4 2016 (annualized and preliminary), less than the forecast of 1.1%.
Japanese Gross Domestic Product
Today in Japan, the Gross Domestic Product report was released by the Cabinet Office. The market was expecting the monetary value of all the goods, services and structures produced in Japan to increase by 1.1% in Q4 2016 (preliminary), compared with the same quarter a year ago.
However, the result was below the forecast, as the Japanese GDP grew by 1% in Q4 2016. When we look at the quarterly change, the Japanese GDP grew by 0.2% in Q4 2016 (preliminary), compared with the previous quarter. This was again below the forecast of 0.3%.
Overall, the result was not as the market expected, resulting in a minor bearish pressure on the Japanese yen and a push for USD/JPY towards 114.00.
USD/JPY Technical Analysis
The US Dollar was seen trading lower this past week against the Japanese yen, as it fell towards 111.60. Later, the USD/JPY pair found support and consolidated above the 111.60 confluence area.
Once the consolidation pattern was complete, there was an upside move in USD/JPY. The pair traded higher, and broke a bearish trend line on the 4-hours chart at 112.60. Moreover, the pair also broke the 100 simple moving average (H4), and the 50% Fib retracement level of the last decline from the 115.37 high to 111.60 low.
At the moment, the pair is facing sellers near another bearish trend line at 114.00. The same area also coincides with the 61.8% Fib retracement level of the last decline from the 115.37 high to 111.60 low. So, it won’t be easy for the US dollar buyers to break 114.00. However, the USD/JPY pair is currently trading with a positive bias, which means there is a chance of a break higher for a move towards 114.50.
