- – The US Dollar enjoyed heavy gains against the Japanese Yen, and settled above 111.00.
- – The USD/JPY pair is currently facing a major connecting bearish trend line at 111.50 on the hourly chart.
- – Today in Japan, the All Industry Activity Index for Feb 2017 (MoM) released by the Ministry of Economy, Trade and Industry posted an increase of 0.7%.
Japanese All Industry Activity Index
Today in Japan, the All Industry Activity Index for Feb 2017 (MoM) was released by the Ministry of Economy, Trade and Industry. The market was positioned for the index to increase by roughly 0.5% in Feb 2017, compared with the previous month.
However, the result better, as the All Industry Activity Index managed to post an increase of 0.7% in Feb 2017, which was also a lot more considering the last +0.1%. On the other hand, in the US, the number of New Home sales in March 2017 (MoM) released by the US Census Bureau posted a rise of 5.8%, which was a lot more than the forecast of -0.5%.
So, it looks like there is hardly any reason for the USD/JPY pair to move below 111.00, but it might correct a few pips lower in the near term.
USD/JPY Technical Analysis
The US Dollar opened with a gap up to 110.25 against the Japanese Yen, and continued to move higher. The USD/JPY did not move down to fill the gap below 109.50. It traded past 110.70 resistance and even broke the 111.00 handle to register healthy gains.
At the moment, the pair is facing a major hurdle above 111.40, as there is connecting bearish trend line at 111.50 on the hourly chart. It is preventing gains, and it looks like the pair may correct below 111.30 in the near term.
On the downside, an initial support is around a short-term bullish trend line at 111.20. A break below it could lead the pair towards the 23.6% Fib retracement level of the last wave from the 109.59 low to 111.50 high. Any further declines should be limited, and in the worst case, the pair may even test the 50% Fib retracement level of the last wave from the 109.59 low to 111.50 high at 110.32.Tags: Japanese Yen, US Dollar, US New Home Sales, USDJPY Technical Analysis