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The Japanese yen continues to struggle around the 120 line, as USD/JPY  gained about 80 points  last week.  There are no Japanese events this week.  Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

In Japan, inflation remains a major problem as inflation indicators continued to edge lower in November. As well, consumer spending reports were weak. Over in the US, In the US, Final GDP for Q3 was excellent, with a rate of 5% annualized growth. Unemployment Claims looked sharp, but durable goods orders and housing data was rather weak.

[do action=”autoupdate” tag=”USDJPYUpdate”/]

USD/JPY graph with support and resistance lines on it:

USDJPYForecast Dec.22-26

USD/JPY Technical Analysis

Dollar/yen started the week at 119.52.  The pair  rose to a high of 120.82, but then retracted and dropped to a low of 119.31. USD/JPY closed the week at 120.35, as support held at 119.88 (discussed last week).

Live chart of USD/JPY: [do action=”tradingviews” pair=”USDJPY” interval=”60″/]

Technical lines from top to bottom:

124.16 marked the start of a yen rally  in June 2007, which saw  USD/JPY drop to the 96 level.

122.19 remains a strong resistance line which has held firm since July 2007.   The next resistance line is  121.39.

119.88 started the week as a weak resistance line but switched to a support role following gains by the pair. It is a weak line and could face pressure early in the week.

117.94 has strengthened in support as the pair moved to higher levels.   The next support level is at 116.82.

114.65  has  remained intact since December 2007, when the yen  posted a  strong rally which saw USD/JPY drop below the 96 line.

113.79 is the final support level for now. It has held firm since early November.

I am  neutral  on  USD/JPY

Trading will be light between Christmas and New Year’s, so we’re unlikely to see any significant movement during the week. The US dollar has enjoyed some recent momentum, so we may see the US dollar post slight gains.

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Further reading: