- – The US Dollar failed to move above the 110.90 level and declined against the Japanese Yen.
- – There was a break below a short-term contracting triangle with support at 110.50 on the hourly chart of the USD/JPY pair.
- – Recently in Japan, the Merchandise Trade Balance Total figure for May 2018 was released by the Ministry of Finance.
- – The outcome was below the market forecast of ¥-235.0B as there was a trade deficit of ¥-578.3B.
Japan’s Merchandise Trade Balance
Recently in Japan, the Merchandise Trade Balance Total figure for May 2018 was released by the Ministry of Finance. The market was positioned for a trade deficit of ¥-235.0B in May 2018, compared with the last surplus of ¥626.0B.
The actual result was below the market forecast of ¥-235.0B as there was a trade deficit of ¥-578.3B. Imports of goods and services in May 2018 increased 14.0% compared with the forecast of +8.2%. Moreover, the Exports of goods and services in May 2018 increased 8.1% compared with the forecast of +7.5%.
The USD/JPY pair is currently trading near the 110.50 level and it seems like there is a risk of a downside move in the near term.
USD/JPY Technical Analysis
The US Dollar traded towards the 111.00 level recently against the Japanese Yen. The USD/JPY pair almost tested the 110.00 level and formed a high near 110.90. Later, there was a downside reaction and the pair declined below the 110.80 and 110.60 levels.
During the decline, there was a break below the 50% Fib retracement level of the last wave from the 109.91 low to 110.90 high. There was even a break below the 110.50 pivot level. However, the decline was protected by the 110.30 level.
Moreover, the 61.8% Fib retracement level of the last wave from the 109.91 low to 110.90 high also acted as a support. The pair is currently recovering, but it seems like upsides might be capped by the 110.60 and 110.70 resistance levels.
If there is a failure to move past 110.70, there could be a downside reaction. Supports on the downside are around 110.30 and 110.10, followed by 110.00.
Also published on Medium.Tags: Japanese Yen, US Dollar, USD/JPY, USD/JPY Technical Analysis