The USD/JPY price is trading at 114.80 at the time of writing below, 114.94 yesterday’s high. The price showed exhaustion signs after failing to reach the 115.00 psychological level. After its amazing swing higher, the currency pair could retreat a little.
However, the bias remains bullish despite a temporary decline. It may test the immediate support levels before resuming its upwards movement.
The USD appreciated the Japanese Yen even if the Dollar Index slipped lower. The currency pair registered a strong leg higher only because the Japanese Yen Futures dropped significantly.
Photo by Vu Nguyen on Unsplash
Fundamentally, the JPY received a helping hand from the Prelim Industrial Production, which reported a 7.2% growth versus 4.9% expected. Likewise, the BOJ Core CPI has registered a 0.8% growth versus 0.5% estimates. In addition, yesterday, the Retail Sales rose by 1.9%, beating 1.8% forecasts.
Unfortunately for the Japanese Yen, the Unemployment Rate raised from 2.7% to 2.8%, even if the specialists expected the rate to remain unchanged In November.
The US House Price Index, Richmond Manufacturing Index, and the S&P/CS Composite-20 HPI will be released later.
USD/JPY price technical analysis: Resistance zone to cap gains
The USD/JPY pair ignored the channel’s upside line, the weekly R1 (114.79), and the upper median line (UML), which represented strong upside obstacles. Now, it has slipped lower trying to retest these levels.
Staying above these broken levels may signal potential upside continuation. On the other hand, dropping and stabilizing below the R1 and under the channel’s upside line may signal a deeper retreat. Technically, the descending pitchfork’s upper median line (UML) represented strong dynamic resistance. A false breakout above it could announce that the leg higher is over.
Jumping and closing above 114.94 yesterday’s high could activate further growth towards the R2 and up to the 150% Fibonacci line.
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