USD/JPY Forecast – US Dollar Correcting Lower Vs Japanese Yen

USD/JPY Forecast – US Dollar Correcting Lower Vs Japanese Yen

  • – The US Dollar started a downside correction after trading towards 111.40 against the Japanese Yen.
  • – There is a declining channel in place with resistance at 111.00 on the hourly chart of the USD/JPY pair.
  • – Recently in Japan, the Merchandise Trade Balance Total for April 2018 was released by the Ministry of Finance.
  • – The outcome was above the market forecast of ¥405.6B as the trade surplus was ¥626.0B.

 

Japan’s Merchandise Trade Balance

Recently in Japan, the Merchandise Trade Balance Total for April 2018 was released by the Ministry of Finance. The market was positioned for a trade surplus of ¥405.6B in April 2018, compared with the last ¥797.3B.

 

The actual result was above the market forecast of ¥405.6B as the trade surplus was ¥626.0B. Looking at the Imports of goods and services, there was an increase of 5.9%, less than the forecast of +9.6% (YoY). Exports of goods and services rose 7.8%, less than the market expectation of +8.1%.

 

The USD/JPY pair seems to be correcting lower towards the 110.60 support and the 100 hourly simple moving average.

 

USD/JPY Technical Analysis

The US Dollar gained a lot of traction during the past few days and moved above the 110.00 and 110.50 resistance levels against the Japanese Yen. The USD/JPY pair even broke the 111.00 level and settled above the 100 hourly simple moving average.

 

USD/JPY Technical Analysis US Dollar Japanese Yen

 

The pair traded as high as 111.39 before starting a downside correction. It moved down and broke the 50% Fib retracement level of the last wave from the 110.60 low to 111.39 high. There was even a close below the 111.00 support level.

 

There is also a declining channel in place with resistance at 111.00 on the hourly chart of the USD/JPY pair. The pair may continue to trade towards the 110.70 support, the 76.4% Fib retracement level of the last wave from the 110.60 low to 111.39 high, and the 100 hourly SMA.

 

However, the most important support is near the last swing low of 110.60. Therefore, any further declines in USD/JPY are likely to find supports on the downside near 110.70 and 110.60.


Also published on Medium.

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