FX.co ★ Technical analysis of USDX & USD/JPY for May 20, 2015

The USDX has paused the four-day falling streak. The index made a double bottom at 93.13. The level of 93.13 is the 161.8FE entire fall from the peak. At yesterday's session, the index managed to close above 100Dema and 20Dsma. The index rejected at 100Dsma at 95.50. The index rejected at the 100Dsma within the recent pullback. In case the index closes above 95.50, the rally will extend towards 95.80/95.90 and 97.00. The 20Wsma is seen at 95.80. Support is found at 95.00 and 94.60. The panic will be triggered below 94.60 aiming to retest the previous low. In case of a daily close below 93.00, bears will aim at 91.50 and 90.70. The index has been consolidating at the level of 95.47 for 12 hours. Intraday strong momentum is expected above 95.70 towards 95.95 and 96.40. Today's key support for bulls to hold is found at 93.88. Ahead of the FOMC meeting, the greenback is trading higher against most majors and USD related pairs. The yen is trading lower against the greenback. We expect the FOMC to eliminate uncertainty. The labor market supported the rate hike and yesterday's housing data raised hope for the rate hike. But we don't expect a hike to take place in June, as it is likely to happen in December 2015.

USD/JPY

At the Asian session, Japan released better-than-expected prelim GDP q/q led by stronger domestic demand. In January- March quarter, the economy expanded 0.6%.The pair extended the winning streak for 4 consecutive days. It gave a strong close for the second day. In case the price closes above 120.50, bulls will aim at 122.0. We expect strong momentum above 121.00 towards 122.00. Earlier, we recommended buyingbetween 119.00 and 118.60 sl 118.50. At yesterday's session, we advised bulls to aim at 120.90 in a day or two until the pair closes above 119.20. Today, the pair is likely to touch the level of 121.00. Buying on dips is seen to be preferable. Fresh intraday buying is advised above 121.00. Support is found at 120.50 and 119.80.

To contact the author of this analysis, please email- joseph.wind@analytics.instaforex.com