Highlights

  • USD / JPY failed to climb above 109.80 and was corrected lower.
  • A key bearish trendline is forming with resistance near 109.05 on the 4 hour chart.
  • EUR / USD remains strong above 1.2180, GBP / USD is considering a further rise above 1.4200.
  • The US manufacturing PMI could remain stable at 50.4 in May 2021 (Preliminary).

USD / JPY technical analysis

Last week, the US dollar attempted to clear resistance at 109.80 against the Japanese yen. The USD / JPY failed to gain strength and reacted lower.

Looking at the 4 hour chart, the pair broke near the 109.78 level. Recently there has been a downward correction below the 109.50 support area. There was also a break below 109.00, the 100 simple moving average (red, 4 hours) and the 200 simple moving average (green, 4 hours).

The bears even pushed the pair below the 50% Fib retracement level of the bullish move from 108.34 to 109.78 low. The first major support on the downside is near the 108.40 level.

If there is a break down below the 108.40 support, the pair could drop sharply to the 107.50 level in the near term. On the upside, the pair faces obstacles near 109.10. There is also a key downtrend line forming with resistance near 109.05 on the same chart.

A clear break above the trendline could take the pair towards the 109.80 level. The main resistance is near the 110.0 level, above which the bulls should gain strength.

Looking at EUR / USD, the pair should accelerate above 1.2250. Likewise, the GBP / USD pair could rise above the 1.4200 level.

Economic press releases

  • UK Retail Sales for April 2021 (YoY) – Forecast + 36.8%, vs. + 7.2% previously.
  • UK Retail Sales for April 2021 (MoM) – Forecast + 4.5%, vs. + 5.4% previously.
  • German Manufacturing PMI for May 2021 (Preliminary) – Forecast 65.9, up from 66.2 previously.
  • Germany Services PMI for May 2021 (Preliminary) – Forecast 52.0, up from 49.9 previously.
  • Euro Zone Manufacturing PMI May 2021 (Preliminary) – Forecast 62.5, up from 62.9 previously.
  • Euro Zone Services PMI for May 2021 (Preliminary) – Forecast 52.3, compared to 50.5 previously.
  • UK Manufacturing PMI for May 2021 (Preliminary) – Forecast 60.7, up from 60.7 previously.
  • UK Services PMI for May 2021 (Preliminary) – Forecast 60.1, up from 60.1 previously.
  • US Manufacturing PMI for May 2021 (Preliminary) – Forecast 50.4, up from 50.5 previously.
  • US Services PMI for May 2021 (Preliminary) – Forecast 64.5, up from 64.7 previously.



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