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USDJPY – Dollar To Yen Preparing For Another Decline

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Aayush Jindal

Key Highlights

  • The US Dollar after a rejection just below 115.00 against the Japanese yen moved down sharply.
  • A monster bearish trend line on the 4-hours chart of USDJPY protected further gains near 114.95.
  • Today, the Japanese Nikkei Manufacturing PMI preliminary reading for Feb 2017 was released, which came in at 53.5 vs the 52.1 forecast.
  • Today, the US Manufacturing PMI preliminary reading for Feb 2017 will be released, forecast 55.2 vs the 55.00 previous.

USDJPY Technical Analysis

The US Dollar is slightly under pressure against the Japanese yen with resistance near 114.00. The USDJPY may decline once again and retest the last swing low of 112.60.USDJPY Technical Analysis Dollar YenThis past week, the pair gained pace and traded towards the 115.00 handle. However, it failed near a monster bearish trend line on the 4-hours chart at 114.94. The rejection was such that the pair moved down sharply.During the downside, it also broke the 50% Fib retracement level of the last wave from the 111.63 low to 114.94 high. So, there are chances that the pair might head lower once again and retest the 112.50-60 support area.Any major corrections from the current levels may face sellers near 113.80 or 114.00.

Japanese Nikkei Manufacturing PMI

In Japan today, the Japanese Nikkei Manufacturing PMI preliminary reading for Feb 2017 was released. The forecast was slated for a decline from 52.7 to 52.1 in Feb 2017.However, the result was better, as the Japanese Nikkei Manufacturing PMI posted an increase from 52.1 to 53.5 in Feb 2017 (preliminary). Commenting on the report, an economist at IHS Markit, Samuel Agass, stated “Japan’s manufacturing engine shifted into a higher gear during February, as faster increases in output, new business and employment were reported. Subsequently, business confidence was at a survey-high, with goods producers buoyed by the strongest upturn in the sector for 35 months”.Japanese Nikkei Manufacturing PMIOverall, it was a positive outcome, but there was no major bullish reaction from the Japanese yen.

US Manufacturing PMI

Today, the US will see the preliminary release of the Manufacturing Purchasing Managers Index (PMI) for Feb 2017 by the Markit Economics. The forecast is slated for an increase from 55.0 to 55.2. So, if there is an expansion, the US Dollar may gain traction in the short term.
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