USD/JPY Consolidates, Signs of Downside Correction Emerge

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Key Highlights

• USD/JPY rallied and traded to a new multi-year high close to 145.00.
• A connecting bullish trend line is forming with support near 143.00 on the 4-hours chart.
• EUR/USD recovered a few points, but faced sellers near 1.0060.
• Gold and oil price might struggle to start a steady recovery wave.

USD/JPY Technical Analysis

The US Dollar started a major increase above the 140.00 resistance against the Japanese Yen. USD/JPY cleared the 142.00 resistance to continue higher.

Looking at the 4-hours chart, the pair settled above the 142.50 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair even climbed above the 144.00 level. It traded to a new multi-year high close to 145.00 and recently started a consolidation phase. If the bulls remain in action, the pair could even clear the 145.00 resistance.

The next major resistance is near 146.20, above which the pair may perhaps rise towards the 147.50 level. The main hurdle sits near the 150.00 level.

If there is a downside correction, the pair might find bids near the 143.50 level. There is also a connecting bullish trend line forming with support near 143.00 on the same chart. A downside break below the trend line support might spark more losses.

The next major support is near the 142.50 level, below which the pair could even test the 142.00 level. Any more losses might send USD/JPY towards the 140.00 support.

Looking at crude oil price, there was a sharp decline below the 85.80 support zone and traded close to the $81.20 support.

Economic Releases

• Canada’s employment Change payrolls for August 2022 – Forecast 15K, versus -30.6K previous.
• Canada’s Unemployment Rate for August 2022 – Forecast 5.0%, versus 4.9% previous.