USD/JPY Analysis – Dollar To Yen Face Bears and More Downsides

USD/JPY Analysis – Dollar To Yen Face Bears and More Downsides

  • – The US Dollar declined recently against the Japanese yen, and even traded below the 115.00 support area.
  • – There is a crucial bearish trend line on the upside at 115.40-155.60 on the 4-hours chart of USD/JPY.
  • – Earlier today, the Japanese New Machinery orders, released by the Cabinet Office posted an increase of 10.4% in Nov 2016, compared with Nov 2015.

 

Japanese New Machinery Orders

There were no major economic releases in the US lately, and none lined up today due to Martin L. King’s Birthday bank holiday. In Japan today, the New Machinery orders figure was released by the Cabinet Office. The market was expecting an increase of 8.1% in Nov 2016, compared with Nov 2015.

 

However, the result was better than the forecast, as there was an increase of 10.4% in the total value of machinery orders placed at major manufacturers. Looking at the monthly change, there was a decrease of 5.1%, which missed the mark when compared with the forecast of -1.7%.

 

Overall, the result was mixed, but there was not major impact on the Japanese yen. It continued to gain traction vs the US Dollar, and was seen trading towards 114.00.

 

USD/JPY Technical Analysis

The US Dollar struggled a lot lately against the Japanese yen, as it fell below the 116.00 and 115.00 support area. The most important thing was a break below the 115.30 support area, which later acted as a resistance and prevented an upside move.

 

USD/JPY Technical Analysis Dollar Yen

 

The pair already tested the 1.618 extension of the last wave from the 115.06 low to 117.54 high, but there is no sign of a major recovery. There are many hurdles on the way up like near 115.40-155.60 in the form of a bearish trend line on the 4-hours chart of USD/JPY.

 

Furthermore, an initial resistance is near the 23.6% Fib retracement level of the last decline from the 116.68 high to 113.61 low. However, the most important hurdle is near 115.30, coinciding with the 50% Fib retracement level of the last decline from the 116.68 high to 113.61 low.

 

In short, the pair looks like heading lower, and may head towards 113.60 once again.

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