USD/JPY – US Dollar Buyers Breaks Key Resistance Vs Japanese Yen

Key Highlights

  • The US Dollar recently formed a base near 108.80 against the Japanese Yen and started a recovery.
  • The USD/JPY pair recently broke a major bearish trend line and resistance near 110.20-40 on the 4-hours chart.
  • Today, the BoJ Interest Rate Decision (June 15, 2017) will be announced by the Bank of Japan, and rates are expected to remain at -0.1%.
  • Recently in the US, the Industrial Production for May 2017 released by the Board of Governors of the Federal Reserve posted no change (0%).

USDJPY Technical Analysis

The US Dollar was in a downtrend since 114.50 against the Japanese Yen. The USD/JPY pair is currently forming a support above 109.50 and looking to challenge a major resistance near 111.40-111.60.

USDJPY Technical Analysis US Dollar Japanese Yen

The 4-hours chart suggests that the 108.80 support is important, and already helped the pair in gaining momentum. The pair traded above the 50% Fib retracement level of the last decline from the 111.71 high to 108.80 low.

Furthermore, buyers were able to take the pair above a major bearish trend and resistance near 110.20-40. On the upside, the pair is facing a crucial resistance near 111.40-60, which also coincides with the 200 simple moving average (H4).

There can be gains towards 111.40, but as long as the pair remains below the 111.60 barrier, it may correct lower towards the 100 SMA.

US Industrial Production and NY Empire State Manufacturing Index

Recently in the US, the Industrial Production for May 2017 was released by the Board of Governors of the Federal Reserve. The market was expecting an increase of 0.2%, compared with the previous month.

The actual result was on the lower side, as there was no change in the US Industrial Production in May 2017. On the other hand, the Empire State Manufacturing Index for June 2017 published by the Federal Reserve Bank of New York posted an increase from -1 to 19.

NY Empire State Manufacturing Index

The report mentioned that:

Business activity rebounded strongly in New York State, according to firms responding to the June 2017 Empire State Manufacturing Survey.

The US Dollar gained momentum after the release, and USD/JPY spiked above 110.40.

Economic Releases to Watch Today

  • Euro Zone CPI for May 2017 (YoY) – Forecast +1.4%, versus +1.4% previous.
  • Euro Zone CPI for May 2017 (MoM) – Forecast -0.1%, versus +0.4% previous.
  • Euro Zone Core CPI for May 2017 (YoY) – Forecast +0.9%, versus +1.2% previous.
  • US Housing Starts May 2017 (MoM) – Forecast 1.215M, versus 1.172M previous.
  • US Building Permits May 2017 (MoM) – Forecast 1.250M, versus 1.228M previous.

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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