The USDJPY pair experienced a significant drop of approximately 120 pips during the Asian trading session, reacting sharply to disappointing GDP data from Japan. Japan's GDP contracted by 2.0% year-over-year, signaling a weakening economic environment that contributed to the initial decline in the USDJPY.
Traders are also closely monitoring upcoming US economic data, including Initial Jobless Claims and the Philadelphia Fed Manufacturing Index. Economists forecast a mixed outcome, with lower Initial Jobless Claims expected to be positive for the US economy, while a lower Philadelphia Fed Manufacturing Index would indicate economic weakness. This mixed forecast introduces uncertainty and may limit traders' willingness to take long positions on the USD, thus potentially capping any significant rebound in USDJPY.
On the technical front, the 1-hour timeframe has revealed a death cross, with the 50-day EMA crossing below the 200-day EMA during the Asian session. This bearish indicator underscores the current downward pressure on USDJPY.
The market has formed a new swing low at 153.60. This level is crucial as it may either provide support or, if breached, continue the bearish trend. Key resistance levels to watch are at 155.80, a previous swing high, and 154.74, a previous swing low. Breaking above 155.80 could suggest a potential bullish reversal. Additionally, traders should monitor the upper band of the Bollinger Band indicator for further resistance.
The MACD signal remains below the zero level, indicating bearish sentiment. However, the histogram above the signal line suggests a potential pullback within the bearish trend. The RSI has moved out of the oversold territory, hinting at a pullback. This is consistent with the recent price rebound following Japan's GDP data release.
The USDJPY pair is currently under bearish pressure due to poor Japanese GDP figures and mixed expectations for upcoming US economic data. Technical indicators align with this sentiment, displaying a death cross and bearish signals from both the MACD and RSI. Key support and resistance levels at 153.60, 154.74, and 155.80 will be critical in determining the pair's next moves. Traders should remain cautious, particularly given the mixed economic forecasts, which add a layer of complexity to the current market dynamics.
Actual -2.0% vs Forecast -1.5% vs Previous 0.0%
Actual -0.5% vs Forecast -0.3% vs Previous 0.0%
Forecast 219K vs Previous 231K
Forecast 7.7 vs Previous 15.5
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