The USD/JPY pair is currently experiencing a downside correction after reaching a peak near 148.80. The pair has traded below a key bullish trend line with support at 147.75 on the 4-hour chart, signaling a possible decline in the near future. Furthermore, the pair has tested the 146.80 support zone and the 23.6% Fibonacci retracement level of the upward move from the 140.24 swing low to the 148.80 high.
If the bears continue to dominate, USD/JPY might decline further below the 146.80 support. The next significant support level lies near 146.20 and is coupled with the 100 simple moving average (red, 4 hours). A break below this level could trigger another sharp decline, potentially leading the pair towards the 200 simple moving average (green, 4 hours) at 144.50.
On the upside, the pair is facing resistance near the 148.20 level, with the next key resistance sitting at 148.80. A successful close above this level could unlock more upside potential for USD/JPY, with the next stop for the bulls possibly being 149.50. If the buying momentum continues, the pair might even break through the 150.00 level.
EUR/USD Struggles to Recover
In contrast, the EUR/USD pair is currently struggling to recover above the 1.0900 resistance zone. The pair is consolidating losses near 1.0850 and finding it challenging to gain momentum for a move above the 1.0920 resistance level.
It is worth noting that the US GDP grew at a 3.3% annual rate in the fourth quarter of 2023, which has contributed to the strength of the US Dollar. This economic data has added pressure on EUR/USD, making it difficult for the pair to regain ground against the greenback.
Economic Releases
Alongside the movement in USD/JPY and EUR/USD, two important economic releases for the United States are also worth noting. The US Personal Income for December 2023 is forecasted to increase by 0.3%, slightly lower than the previous reading of 0.4%. Additionally, the US Core Personal Consumption Expenditure for the same period is expected to show a 0.2% increase, compared to the previous reading of 0.1%.
These economic releases will likely have an impact on the currency markets, potentially influencing the future direction of both USD/JPY and EUR/USD.
USD/JPY is currently in a downside correction phase, with key support levels to watch out for. On the other hand, EUR/USD is struggling to recover against the strong US Dollar. Traders and investors should closely monitor these currency pairs and the upcoming economic releases to make informed trading decisions in the forex market.
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