Fan Yang
1
All posts from Fan Yang
Fan Yang in Fan Yang,

USD/JPY Retreats from Resistance Despite Positive GDP Revision

Today, we saw the final revision of Q1 GDP data for the US. The Census Bureau revised the annualized GDP growth rate to be 1.4% in Q1, up from the originally estimated 1.2%. Usually, this would mean the FOMC will have more reason to raise rates, but 1.2% to 1.4% is not really a big deal especially since this is still dealing with Q1 GDP. We are already seeing some subdued growth and inflation data in Q2. 

USD/JPY indeed was NOT inspired by this upwards revision. It instead retreated after testing a falling resistance.

USD/JPY Daily Chart

(click to enlarge)

Resistance Holds:
- As we can see on the daily chart, price has actually been testing the resistance for a couple of sessions before the 6/29 session.
- So far, the resistance is holding, and USD/JPY remains in a sideways mode, with maybe some near-term bearish outlook.
Downside; Central Pivot:
- Looking at the 4H chart, we can see that price fell sharply after testing 113 and after the GDP revision was released.
- The bearish engulfing candle sets up a bearish outlook at least in the very short-term.
- I think the central pivot here will be important. The central pivot in this case is the 110.60-110.85 area. 
- We should monitor this area. If price holds above this area, preferably above 111, then there would be bullish bias, and I would anticipate a breakout above the triangle.
- A break below 110.60 on the other hand reflects the status quo for the past 2, 3 months - directionless or sideways.