Politics is again taking a center stage this week for the U.S dollar as President Trump is set to unveil the “big” announcement on tax reform. Will investors see reasons to buy the greenback or a big dump coming? let’s take a look at USDJPY daily technical outlook Pre Trump tax proposal details
25 April, AtoZForex – USDJPY gapped up above the 110 region following the market-friendly first round of the French election result. The broader tone remain dominant and the 108.20 key support zone remain unchallenged. This week’s risks further leave the Japanese yen more vulnerable to further downside as we look to Wednesday’s Trump tax proposal details, Thursday’s BoJ and ECB, and Friday’s Q1 GDP. The greatest domestic risk this week lies with the BoJ policy decision and also releases of CPI, retail sales, and industrial production data. The BoJ is expected to maintain an exceptionally dovish tone and underscore the need for continued accommodation as it releases its latest forecast for inflation and growth. The near-term balance of risk favors yen weakness
USDJPY daily technical outlook Pre Trump tax proposal details; Daily Chart
From the technical standpoint, bearish momentum signals have shifted on hitting 108.20 confluence support zone. We have in the previous piece stated how vital that support zone is if price must rotate back up. On the daily frame, the corrective decline from the high of 118.66 to the low of 108.13 has taken a shape of a falling wedge (Bullish wedge). The 108.20 support region tested was a key level if this wedge must remain valid. As expected, a reaction occurred at the mentioned level. Price has traded into the bullish territory so far. As long as the key 108.20 support remain unbreached, 111.50 and 112 remain attractive. With near-term resistance above 110.50. We look to gains toward the April 11 open around 111.50
The hourly frame speaks a language that is in tandem with the tone of the daily frame. Price is currently trading above the trend line connector (March high to the April high). Moreso, 100-Day moving average is seen to be bull supportive which adds credence to the daily posture. Going forward, we favor potential for more upside push. However, a daily close below 108.86 invalidates the scope for a further rally.
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