USD/JPY Forecast – Can US Dollar Hold This Vs Japanese Yen?
- – The US Dollar recently traded above 112.10 against the Japanese Yen, but failed to hold gains.
- – The USD/JPY pair is currently trading inside a major contracting triangle with support at 111.50 on the hourly chart.
- – Today in Japan, the National Consumer Price Index for April 2017 released by the Statistics Bureau posted an increase of 0.4% (YoY).
Japan’s National Consumer Price Index
Today in Japan, the National Consumer Price Index for April 2017 was released by the Statistics Bureau. The market was positioned for an increase of 0.4% in the CPI in April 2017, compared with the same month a year ago.
The actual result was as per the forecast, as the National Consumer Price Index increased 0.4%, which was more than the last +0.2%. On the other hand, the National CPI ex-Fresh Food increased 0.3%, which was less than the forecast of 0.4%. Moreover, the National CPI ex-Fresh Food and Energy posted no change, compared with the last -0.1% in April 2017.
The Japanese Yen gained traction after the release, but the USD/JPY pair managed to hold the 111.50 support area.
USD/JPY Technical Analysis
The US Dollar moved nicely in an uptrend, and traded above the 112.00 resistance against the Japanese Yen. The USD/JPY pair traded as high as 112.12 where it faced resistance and started a downside move back below 112.00.
During the downside move, the pair broke the 23.6% Fib retracement level of the last wave from the 110.85 low to 112.12 high. However, the downside move was protected by the 111.50-40 support and the 100 hourly simple moving average.
At the moment, the pair is trading inside a major contracting triangle with support at 111.50 on the hourly chart. The triangle support is also around the 50% Fib retracement level of the last wave from the 110.85 low to 112.12 high.
Clearly, the 111.50-40 supports holds the key for the next move along with the 100 hourly simple moving average. As long as the pair is above 111.40, there is a chance of a bounce back towards 112.00 in the near term.
