USDJPY – Dollar Yen Awaits Economic Data; More Losses Eyed?

Key Highlights

  • The US Dollar suffered losses recently, as it traded below the 104.00 support against the Japanese yen.
  • There were two trend lines break noted on the 4-hours chart of USDJPY, which ignited a downside move towards 103.00.
  • The US Initial Jobless Claims will be released by the US Department of Labor and forecasted to remain at 258K.
  • The US ISM Non-Manufacturing Index will be reported by the Institute for Supply Management (ISM) and is forecasted to decline from 57.1 to 56 in Oct 2016.

USDJPY Technical Analysis

The US dollar failed to retain the bullish bias above 105.50 against the Japanese yen and traded lower this week. There was a sharp decline in USDJPY, and it looks like the pair may continue lower.

USDJPY Technical Analysis

There are a couple of important points to note. First, there was a break below two trend lines on the 4-hours chart of USDJPY. Second, there was a close below the 104.00 support area. Lastly, the pair also broke the 100 simple moving average (H4), igniting a downside move.

It looks like the pair may soon test the 1.236 extension of the last wave from the 103.16 low to 105.52 high. The H4 RSI is around the oversold readings, so there is a chance of a minor correction. However, in that case, the pair may find sellers near the 100 simple moving average (H4) or the broken trend line.

US Initial Jobless Claims and ISM Non-Manufacturing Index

Today in the US, there are a few important economic releases, including the ISM Non-Manufacturing Index and the Initial Jobless Claims.

The most important one will be the ISM Non-Manufacturing Index, which will be reported by the Institute for Supply Management (ISM). It shows business conditions in the US non-manufacturing sector and is forecasted to decline from 57.1 to 56 in Oct 2016.

If there is a decline in the ISM Non-Manufacturing Index, the US Dollar may come under a bearish pressure in the short term.

Moreover, the Initial Jobless Claims will be released by the US Department of Labor. The market is forecasted for no change in the number of people filing first-time claims for state unemployment insurance from the last reading of 258K. Let us see how these events deliver, and how the greenback trades during the NY session.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade 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, commodities, Bitcoin and Ethereum markets.

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