50 EMA Supports Japanese Yen
The USD/JPY was closed at $110.77 after placing a high of $110.99 and a low of $110.48. USD/JPY extended its loss on Friday but remained positive for the third consecutive week. After spending half of the day in a relatively tight range below $110, the USD/JPY currency pair lost its traction and fell to its fresh daily low at 110.48. The recent pressure was driven by the weak U.S. dollar and the rising risk-off market sentiment that dragged the USD/JPY pair on Friday.
On the data front, at 17:30 GMT, the Core PCE Price Index fell to 0.5% against the predicted 0.6% and weighed on the U.S. dollar that added further loss in the USD/JPY pair. In May, the Personal Income declined to -2.0% against the estimated -2.5% and supported the U.S. dollar that limited the decline in the USD/JPY pair. However, Personal Spending fell to 0.0% against the projected 0.4% and weighed on the U.S. dollar that dragged the USD/JPY lower. At 19:00 GMT, the Revised UoM Consumer Sentiment dropped to 85.5 against the projected 86.5 and weighed on the U.S. dollar that further caped loss in USD/JPY. The Revised UoM Inflation Expectations remained flat at 4.2%.
From the Japanese side, at 04:30 GMT, the Tokyo Core CPI for the year rose to 0.0% against the forecasted -0.1% and pushed JPY higher that also supported the declining prices of USD/JPY on Friday. The two primary data figures under close observation by the investors, including the Core PCE Price Index for determining the inflation position of the country and Revised UoM Consumer Sentiment, came in against the U.S. dollar and made it weak against its rival currencies. The U.S. Dollar Index also remained flat throughout the day at 91.85 level and added further weakness in the greenback that drove USD/JPY lower for the day.
Furthermore, the U.S. dollar was also weak because of the recent announcement from U.S. President Joe Biden that a bipartisan group of senators had reached a deal on an infrastructure plan for the nation worth $1.2 trillion. As the debts will fund this amount, it weighed heavily on the U.S. dollar and added further losses in the USD/JPY pair.
Apart from the weakness of the U.S. dollar, the rising risk-off market sentiment in the market also played an essential role in dragging the USD/JPY pair downwards. The increasing number of coronavirus cases and deaths in the Asia-Pacific region of the world due to another wave of coronavirus prompted many countries to renew lockdown measures and restrictions. Indonesia saw more than 24,000 cases in a single day, while Moscow recorded 144 deaths in 24 hours. This added in the risk-off market sentiment and helped the Japanese Yen gather strength against the U.S. dollar, which ultimately added further loss in the USD/JPY pair.
EURUSD Intraday Technical Levels
Support Resistance
110.77 110.85
110.71 110.89
110.68 110.94
Pivot Point: 110.80
USD/JPY - Technical Outlook
The USD/JPY is trading at the 110.650 level, gaining support at the 50 periods moving average area of 110.480. On the 4 hour timeframe, the USD/JPY faces immediate resistance at the 111.053 level, where a bullish breakout of this level can lead its price towards the 111.450 level. On the 4 hour timeframe, the USD/JPY has formed an upward channel, and the closing of candles inside this supports bullish bias among investors. The MACD and 50 moving periods are also supporting an upward trend in the USD/JPY pair. Let’s keep an eye on the 110.80 resistance level today, as a bullish breakout can expose the pair towards the next resistance level of 111.053 level. All the best!
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