- – The US Dollar started to decline from the 110.25 high and moved below 109.00 against the Japanese Yen.
- – There was a break below a major bullish trend line with support at 109.70 on the hourly chart of the USD/JPY pair.
- – Recently in the US, the ISM Non-Manufacturing Index for Jan 2018 was released by the Institute for Supply Management (ISM).
- – The outcome was above the market forecast of 56.5, but there was an increase from the last revised reading of 56.0 to 59.9.
US ISM Non-Manufacturing Index
Recently in the US, the ISM Non-Manufacturing Index for Jan 2018 was released by the Institute for Supply Management (ISM). The market was positioned for the index to increase from 55.9 to 56.5.
The result was above the market forecast of 56.5, but there was an increase from the last revised reading of 56.0 to 59.9. The last reading was revised up from 55.9 to 56.0. The report added that:
This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 59.8 percent, 2 percentage points higher than the seasonally adjusted December reading of 57.8 percent, reflecting growth for the 102nd consecutive month, at a faster rate in January.
The USD/JPY pair is currently under a lot of pressure and it seems like it could extend declines below 108.50 in the near term.
USD/JPY Technical Analysis
The US Dollar traded above the 110.00 level this past week against the Japanese yen. The USD/JPY pair traded as high as 110.43 and later it started a downside wave. An intermediate high was formed at 110.26 from where the pair crashed below 109.00.
During the downside, there was a break below a major bullish trend line with support at 109.70 on the hourly chart. The pair broke the 109.00 and 108.80 support levels to settle below the 100 hourly simple moving average. It traded as low as 108.53 and it currently remains at a risk of more declines.
An initial resistance on the upside is around the 23.6% Fib retracement level of the last drop from the 110.26 high to 108.53 low. It seems like the pair may extend declines and it could even break the 108.50 support.
On the upside, the pair faces important resistances near the 109.00 and 109.20 levels.Tags: Japanese Yen, US Dollar, USD/JPY, USD/JPY Technical Analysis