USD/JPY: A Look at US Dollar to Japanese Yen Daily Chart
Aayush Jindal
Key Highlights
The US Dollar is following a descending structure against the Japanese Yen with resistance near 114.00-115.00.
There is a monster expanding triangle pattern formed with support at 106 and resistance at 114.50 on the daily chart.
Today, Japan’s Nikkei Manufacturing PMI for May 2017 (Preliminary) released by Markit Economics posted a decline from 52.7 to 52.0.
In the US, the Manufacturing Purchasing Managers Index (PMI) for May 2017 (Preliminary) will be released today, which is forecasted to increase from 52.8 to 53.0.
USD/JPY Technical Analysis
The daily chart of USD/JPY suggests a declining structure for the US Dollar towards 110.00 against the Japanese Yen. The pair faced a major resistance near 115.00, and may continue heading lower.The worst thing at the moment for the USD buyers is a close below the 100-day SMA at 112.75. It ignited a sharp downside move towards 110.50. The pair is finding support at 61.8% Fib retracement level of the last wave from the 108.13 low to 114.37 high.So, there is a chance of a minor correction towards the 100-day SMA at 112.75, but it is likely to be short-lived.As long as the pair is following the highlighted expanding triangle pattern with resistance at 114.50, there can be more declines towards 110.00 or even 108.00.
Japan’s Nikkei Manufacturing PMI
Today in Japan, the Nikkei Manufacturing PMI Preliminary reading for May 2017 was released by Markit Economics. The forecast was lined up no major change from the last reading of 52.8.The result was a bit lower, as the Nikkei Manufacturing PMI is expected to post a decline to 52.0 in May 2017, according to the preliminary release. Commenting on the report, the Senior Economist at IHS Markit, Paul Smith, stated:May’s PMI data signalled a broad-based slowdown in growth of the manufacturing sector, with output, new orders and employment all rising at their slowest rates since last November.Overall, there can be swing moves in USDJPY, but the trend is basing for a medium term bearish bias below 114.00.
Economic Releases to Watch Today
German Gross Domestic Product for Q1 2017 (YoY) – Forecast 1.7%, versus 1.7% previous.
German Gross Domestic Product for Q1 2017 (QoQ) – Forecast 0.6%, versus 0.6% previous.
Germany’s Manufacturing PMI for May 2017 (Preliminary) - Forecast 58.0, versus 58.2 previous.
Germany’s Services PMI for May 2017 (Preliminary) - Forecast 55.4, versus 55.4 previous.
Euro Zone Manufacturing PMI May 2017 (Preliminary) – Forecast 56.5, versus 56.7 previous.
Euro Zone Services PMI for May 2017 (Preliminary) – Forecast 56.4, versus 56.4 previous.
US Manufacturing PMI for May 2017 (Preliminary) – Forecast 53.0, versus 52.8 previous.
US Services PMI for May 2017 (Preliminary) – Forecast 53.1, versus 53.1 previous.
US New Home Sales for April 2017 (MoM) – Forecast -1.3%, versus +5.8% previous.
The worst thing at the moment for the USD buyers is a close below the 100-day SMA at 112.75. It ignited a sharp downside move towards 110.50. The pair is finding support at 61.8% Fib retracement level of the last wave from the 108.13 low to 114.37 high.So, there is a chance of a minor correction towards the 100-day SMA at 112.75, but it is likely to be short-lived.As long as the pair is following the highlighted expanding triangle pattern with resistance at 114.50, there can be more declines towards 110.00 or even 108.00.
The result was a bit lower, as the Nikkei Manufacturing PMI is expected to post a decline to 52.0 in May 2017, according to the preliminary release. Commenting on the report, the Senior Economist at IHS Markit, Paul Smith, stated:May’s PMI data signalled a broad-based slowdown in growth of the manufacturing sector, with output, new orders and employment all rising at their slowest rates since last November.Overall, there can be swing moves in USDJPY, but the trend is basing for a medium term bearish bias below 114.00.