USDJPY – 118.0 As Pivot Area

USDJPY – 118.0 As Pivot Area, Can it Recover?

Key Highlights            

  • US Dollar after trading lower towards the 116.60-50 support area against the Japanese Yen found support.
  • There are a couple of bearish trend lines formed on the hourly chart of the USDJPY pair, which are stalling gains currently.
  • Japanese Trade Balance – BOP Basis released by the Customs Office posted a trade deficit of ¥-271.5B, compared with the last surplus of ¥200.2B.
  • Japanese Bank lending, released by Bank of Japan posted an increase of 2.2% in December 2015, which was less compared with the last rise of 2.3%.

USDJPY Technical Analysis

The US Dollar faced a tough time against the Japanese Yen recently, and as a result, the USDJPY pair traded lower towards the 116.50 support area. This week the pair started a recovery mode, but it looks like there are many hurdles on the way up for the US Dollar buyers.

USDJPY chart

There are a couple of bearish trend lines formed on the hourly chart of the USDJPY pair, which are acting as a barrier for more gains and preventing an upside break.

The 100 hourly simple moving average is positioned just around the trend lines and resistance area, which means the importance of 117.80-118.00 is huge. Only a break above the stated level could ignite a solid recovery in the USDJPY pair. Otherwise, there are chances of more losses in the near term.

Japanese Trade Balance – BOP Basis

Today, there were a couple of minor economic releases in Japan. First, the Trade Balance – BOP Basis, which is a measure of balance amount between import and export was released by the Customs Office. The outcome was disappointing, as there was a trade deficit of ¥-271.5B in November 2015, compared with the last surplus of ¥200.2B.

Second, the Japanese Bank lending, which is the value of all outstanding loans with Japanese banks, and is considered an important factor because lending increases with increased business confidence and investment was released by Bank of Japan. The outcome was mixed, as there was an increase of 2.2% in Lending in December 2015, compared with the same month a year ago. It was lower compared with the last rise of 2.3%.

Overall, there is a possibility of Japanese Yen trading or correcting lower in the near term.



Mar