Baxia Markets
December 21, 2023

Eyes on USDJPY: Critical Levels, Economic Data, and Market Sentiment

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Today's US trading session is poised for pivotal economic releases, notably the US GDP forecasted at 5.2%, reflecting a robust economy compared to the previous 2.1%. Concurrently, Initial Jobless Claims are anticipated to rise to 214k, signaling potential shifts in market sentiment.


Analysts project a stronger performance in the US economy, potentially bolstering the USD. As economic indicators influence currency strength, traders are keenly observing these releases for their impact on USDJPY dynamics.Eyes on USDJPY: Critical Levels, Economic Data, and Market Sentiment

Technical Analysis - USDJPY H4 Chart:


USDJPY has been ensnared beneath a descending trendline for the past 5 to 6 weeks, indicating a persistent bearish trend. Notably, the pair found support at the ascending trendline, confirmed by a bullish harami candlestick pattern, signifying potential resilience. EMA 50 positioned under EMA 200 signals a bearish trend. Both lines are expanding, underscoring the robust bearish momentum.


Looking at oscillator indicators, they are giving mixed signals. MACD histogram and signal line below the 0 line suggest a bearish stance. RSI broke above the 60% level, maintaining a position above 40%, offering a mixed signal.


The pair's stability hinges on the critical support at 140.961 and the ascending trendline. Economic data below forecasts may jeopardize these levels. A positive economic outcome could propel USDJPY to break above EMA 200, paving the way for a potential golden cross.


As traders brace for economic revelations, USDJPY stands at a crossroads. A robust US economy may trigger bullish movements, challenging the current bearish trajectory. Conversely, weaker-than-expected data may intensify bearish pressures, putting key support levels at risk. Stay attuned to the evolving landscape for informed decision-making.

Key Economic Releases to Watch Today

EUR, GDP (QoQ) (Q3)
Forecast 5.2% vs Previous 2.1%

USD, Initial Jobless Claims 
Forecast 214k vs Previous 202k

USD, Philadelphia Fed Manufacturing Index (Dec)
Forecast -3.0 vs Previous -5.9

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