USD/JPY – Can US Dollar Break 111.80 Vs Japanese Yen?
Aayush Jindal
Key Highlights
The US Dollar is facing a major resistance near 111.70-80 against the Japanese Yen.
Earlier this month, the USD/JPY pair broke a monster contracting triangle at 110.10 on the 4-hours chart.
Today in Japan, the Nikkei Manufacturing PMI for June 2017 (Preliminary) was released, which came in at 52.0, down from the last 53.1.
Today, the US number of New Home sales figure for May 2017 will be released, which is forecasted to increase by 5.5% (MoM).
USDJPY Technical Analysis
During May 2017 and first two weeks of June 2017, the US Dollar mostly declined and traded towards 109.00 against the Japanese Yen. The USD/JPY pair is currently correcting, but facing a major resistance near 111.70-80.Looking at the 4-hours chart of USD/JPY, the pair broke a monster contracting triangle at 110.10. It also succeeded in moving above the 100 simple moving average (H4) at 110.50 and the 38.2% Fib retracement level of the last decline from the 114.37 high to 108.77 low.At the moment, the pair is facing a crucial resistance near 111.70-80. The stated resistance at 111.80 acted as a support earlier, and now preventing gains. It also coincides with the 50% Fib retracement level of the last decline from the 114.37 high to 108.77 low.So, as long as the pair is below 111.80, a break above the 112.00 handle won’t be easy in the near term. On the downside, the 100 SMA (H4) at 110.50 is a key support area.
Japan’s Nikkei Manufacturing PMI
Today Japan, the Nikkei Manufacturing PMI for June 2017 (Preliminary) was released. The market was positioned for no major decline from the last reading of 53.1.The actual result was a bit on the lower side, as the PMI declined from 53.1 to 52.0. The report stated that “Flash Japan Manufacturing PMI down to seven-month low of 52.0 in June (53.1 in May). Flash Manufacturing Output Index at 52.1 (54.0 in May). Slowest growth for nine months“.It seems like USD/JPY has a real chance to gain momentum and move above 111.80, but before that it can dip a few pips in the near term.
Economic Releases to Watch Today
Germany’s Manufacturing PMI for June 2017 (Preliminary) - Forecast 59, versus 59.5 previous.
Germany’s Services PMI for June 2017 (Preliminary) - Forecast 55.5, versus 55.4 previous.
Euro Zone Manufacturing PMI for June 2017 (Preliminary) – Forecast 56.8, versus 57.0 previous.
Euro Zone Services PMI for June 2017 (Preliminary) – Forecast 56.2, versus 56.3 previous.
France Manufacturing PMI for June 2017 (Preliminary) – Forecast 54.0, versus 53.8 previous.
US Manufacturing PMI for June 2017 (Preliminary) – Forecast 53.0, versus 52.7 previous.
US New Home Sales for June 2017 (MoM) – Forecast +5.5, versus -11.4% previous.
Canadian Consumer Price Index May 2017 (MoM) – Forecast +0.3%, versus +0.4% previous.
Canadian Consumer Price Index May 2017 (YoY) – Forecast +1.5%, versus +1.6% previous.
Looking at the 4-hours chart of USD/JPY, the pair broke a monster contracting triangle at 110.10. It also succeeded in moving above the 100 simple moving average (H4) at 110.50 and the 38.2% Fib retracement level of the last decline from the 114.37 high to 108.77 low.At the moment, the pair is facing a crucial resistance near 111.70-80. The stated resistance at 111.80 acted as a support earlier, and now preventing gains. It also coincides with the 50% Fib retracement level of the last decline from the 114.37 high to 108.77 low.So, as long as the pair is below 111.80, a break above the 112.00 handle won’t be easy in the near term. On the downside, the 100 SMA (H4) at 110.50 is a key support area.
The actual result was a bit on the lower side, as the PMI declined from 53.1 to 52.0. The report stated that “Flash Japan Manufacturing PMI down to seven-month low of 52.0 in June (53.1 in May). Flash Manufacturing Output Index at 52.1 (54.0 in May). Slowest growth for nine months“.It seems like USD/JPY has a real chance to gain momentum and move above 111.80, but before that it can dip a few pips in the near term.