USD / JPY Technical Analysis: Close at 110.00
The bullish performance of the USD / JPY will be strengthened if the pair crosses the psychological resistance of 110.00.
The yen is a popular asset during times of turbulence.
The bulls dominated the performance of the USD / JPY to some extent, with gains pushing the pair to the resistance level of 109.34, where it ended the week’s trading. This speculation has risen by a further opportunity to move towards the psychological resistance at 110.00 which would confirm a bullish move to the upside. The US dollar gained momentum as the world’s largest economy accelerated sharply in the first quarter of 2021, which bodes well for both the US growth outlook and the global recovery. widely expected in 2021. US GDP growth increased from a quarterly quarter. pace. It fell from 4.3% at the end of 2020 to 6.4% in the first months of 2021, just below the 6.8% forecast by economists.
U.S. consumers are leading the growth growth, supported by unprecedented financial support programs for families, in addition to actions by U.S. states to ease restrictions related to the virus. Personal consumption spending and federal government spending were the main contributors to this growth. Fixed non-residential investment and fixed residential investment also contributed to the recovery. “Assuming the COVID variables are still contained, the second quarter should see further acceleration in growth as the reopening continues,” said Kathryn Judge, economist at CIBC Capital Markets.
Within personal consumption expenditure, durable goods saw the largest increases in production, mainly cars and spare parts, although non-durable goods such as food and beverages saw a strong increase in demand. alongside service providers in the catering and accommodation sector. At the same time, increases in government spending “primarily reflect an increase in payments to banks for processing and managing Paycheck Protection Program loan applications” and government procurement of coronavirus vaccines.
The subtraction of the US recovery in the first quarter was the reduction in exports. Falling exports are a symptom of weak global demand as many major European economies and the rest of the world have returned to lockdowns or activity restrictions in the face of soaring infections and poor immunization progress.
But even with declining global demand for US goods and services, an increase in corrosive imports of GDP into America will act as a catalyst for those depleted economies elsewhere, which are expected to largely recover with increased enthusiasm as the year progresses and with the potential to have beneficial implications for US exports.
The economic recovery in the United States has started since January with another notable fiscal stimulus package of $ 1.9 trillion, dubbed the “American bailout”, all of which are made possible, while being supported in its effectiveness by US monetary policy. Federal Reserve. Fed officials made it clear in their April monetary policy update that they would not be inclined to end the bank’s $ 120 billion monthly quantitative easing program or raise the range of virtually zero interest rates through “temporary” increases in inflation in future neighborhoods.
Technical analysis of the pair:
The bullish performance of the USD / JPY will be strengthened if the pair crosses the psychological resistance of 110.00, which would lead to a move towards higher resistance levels, the closest of which are 109.85, 110.35 and 111.20. These levels are important to confirm a return to an uptrend. On the other hand, a move towards the 108.40 support level will eliminate bullish expectations and strengthen the declines.
The currency pair will be affected by the extent of investor risk appetite, as well as the announcement of US economic data, as the ISM manufacturing PMI reading and the construction spending rate will be announced, then new statements from US Federal Reserve Chairman Jerome. Powell.