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USD/JPY Awaits GDP Data to be Liberator From Range

The USD/JPY is consolidating in a range roughly between 117.20 and 118.85. 

USD/JPY 4H Chart 1/30

(click to enlarge)

Even the hawkish FOMC did not break the pair out of this range, it simply helped USD/JPY find support above 117.20 again. 

Today's (1/30) GDP data might help liberate the pair out of this range. US Q4 GDP is expected to be around 3.0% when annualized. The Q3 reading was 5.0%. With the FOMC being optimistic, the market will probably be bullish on the USD if the reading is indeed 3.0% or better.

Bullish Scenario: Let's say if the reading is 3.5% better, we should expect USD/JPY to break above the 118.85 resistance. It should then test the triangle resistance seen in the daily chart, which is just under 120. There would also be risk of breaking above 120 towards the 121.70, 2014-high if the reading is closer to 4.0% or better.

Bearish Scenario: If the reading disappoints sharply, like below 2.0%, we should expect a break below 117.20, which should expose the 115.56-115.85 triangle low, with risk of breaking lower, the closer the reading is to 0.0%.

However, if we only get a slightly disappointment (2%-3%), the USD/JPY should remain in the triangle. In this scenario, if price breaks above 118.85, expect resistance to be strong around 120. Below 117.20 the USD/JPY should find strong support again around the 115.56-115.85 area.

USD/JPY Daily Chart 1/30
(click to enlarge)