USD/JPY To Find Major Support At 101.00, Bullish Reversal Likely

USD/JPY held off the channel support on Thursday after the upbeat US job reports and minutes from the Bank of Japan (BoJ) monetary policy meeting. The pair is expected to pull back from the 101.00 support area, targeting the 103.30 resistance.

Technical Analysis

As of this writing, the pair is being traded near 101.58. Support may be seen around 101.33, the low of yesterday ahead of the 101.00 handle that is the 50% fib level as well as long term trendline support. A break and daily closing below the 101.00 support will push the pair into stronger bearish territory, opening doors for further dips below the 100.00 handle.

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On the upside, the pair is likely to face hurdle around 102.03 that is the 38.2% fib level resistance before 102.35, 55 Daily Moving Average (DMA). The short term sentiment is bullish and will remain bullish as far as 101.20 support remains intact as per swing analysis.

US Employment Reports

The jobless claims in the US dropped to 300,000 during the previous week as compared to 326,000 in the week before, a report by the labor department revealed yesterday. The jobless claims figure came above the median projection of 320,000 hence showing steady progress in the labor sector.

Similarly, the total number of people having jobless benefits also declined to 2.776 million during the week ended on March 28 compared with 2.838 million in the week before, analysts had predicted an increase to 2.850 million during the aforementioned period.  USD/JPY fell despite the upbeat job reports, showing considerable weakness in the price action.

Conclusion

The pair is expected to find support around the 101.00 handle before resuming the upside movement amid US growth optimism and fragile recovering in Japan. 

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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