USDJPY – US Dollar Recovery A Real Deal Vs Japanese Yen

Key Highlights

  • The US Dollar declined below 109.00 this past week against the Japanese Yen before finding support.
  • A recovery is underway, but the USDJPY pair is likely to face resistance near 109.50 and a bearish trend line on the 4-hour chart.
  • Today in Japan, the Nikkei Manufacturing PMI for April 2017 (Preliminary) was released, which posted a rise from 52.4 to 52.8.
  • Today in the US, the Manufacturing Purchasing Managers Index (PMI) for April 2017 (Preliminary) will be released by the Markit Economics, which is forecasted to increase from 53.3 to 53.5.

USDJPY Technical Analysis

The US Dollar decline against the Japanese Yen found support near 108.20. At the moment, the USDJPY pair is under a recovery, but can it continue to correct higher in the near term?

USDJPY Technical Analysis Dollar To Yen

The pair recently broke the 23.6% Fib retracement level of the last decline from the 111.57 high to 108.13 low. However, the most important move was above a contracting triangle pattern at 108.80.

If the highlighted break is true, there are chances of more gains in the near term towards 110.00. However, a monster bearish trend line and previous support at 110.00 is waiting to act as a resistance.

In short, there can be more gains in USDJPY, but it is likely to face a lot of hurdles on the way up towards 110.00.

Nikkei Manufacturing PMI

Earlier during the Asian session, the Japanese Nikkei Manufacturing PMI for April 2017 (Preliminary) was released. The market was positioned for an increase from the last reading of 52.4 to 52.6 in April 2017.

Japanese Nikkei Manufacturing PMI April 2017

The result was above the forecast, as the Nikkei Manufacturing PMI posted a rise from 52.4 to 52.8 in April 2017. Commenting on the report, a Senior Economist at IHS Markit, Paul Smith, stated:

April’s PMI data signaled continued healthy growth of Japan’s manufacturing sector, and the latest results were again consistent with production rising at a quarterly rate of around 2%.

Overall, the result was positive, which is why there was a minor dip in USDJPY, but overall, the pair may soon climb back towards 109.50 in the near term.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI for April 2017 (Preliminary) – Forecast 58.0, versus 58.3 previous.
  • Germany’s Services PMI for April 2017 (Preliminary) – Forecast 55.5, versus 55.6 previous.
  • Euro Zone Manufacturing PMI April 2017 (Preliminary) – Forecast 56.3, versus 56.2 previous.
  • Euro Zone Services PMI for April 2017 (Preliminary) – Forecast 56, versus 56 previous.
  • US Manufacturing PMI for April 2017 (Preliminary) – Forecast 53.5, versus 53.3 previous.
  • US Services PMI for April 2017 (Preliminary) – Forecast 53, versus 52.8 previous.


Aayush Jindal

Aayush is a Senior Forex/Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over seven years as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency and commodities markets.

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