USD/JPY – US Dollar Turning Bearish Vs Japanese Yen

Key Highlights

  • The US Dollar failed to settle above 114.50-115.00 levels against the Japanese Yen and moved down.
  • It seems like the USD/JPY broke a major triangle support at 113.85 on the 4-hours chart.
  • The US Wholesale Inventories in Sep 2017 increased 0.3%, just as the market expected.
  • Today, the Michigan Consumer Sentiment Index (Prelim) for Nov 2017 will be released, which is forecasted to remain at 100.7.

USDJPY Technical Analysis

In the forex monthly November 2017, we discussed the importance of 115.00 for the US Dollar versus the Japanese Yen. The USD/JPY pair failed to move above 114.50-115.00 and started a downside move.

USDJPY Technical Analysis US Dollar Japanese Yen

During the downside, the pair broke major triangle support at 113.85 on the 4-hours chart. The pair also broke the 61.8% Fib retracement level of the last wave from the 112.95 low to 114.73 high.

Therefore, there are chances of it extending declines in the near term towards the 113.00 level or 112.53. On the upside, the broken support near 113.80-114.00 would act as a resistance.

Above 114.00, the 114.50 and 115.00 levels are major barriers for buyers in the medium term.

US Wholesale Inventories

Recently in the US, the Wholesale Inventories report for Sep 2017 was released by the US Census Bureau. The market was looking for the Wholesale Inventories to increase by 0.3% in Sep 2017 similar to the last +0.3%.

The actual result was in line with the forecast, as the Wholesale Inventories rose 0.3% to register $609.5 billion.

US Wholesale Inventories Sep 2017

The report added:

September 2017 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $480.5 billion, up 1.3 percent (±0.4 percent) from the revised August level and were up 8.5 percent (±1.2 percent) from the September 2016 level.

To sum up, the short-term trend is now bearish for USD/JPY below 114.00 and the pair is poised for more losses.

Economic Releases to Watch Today

  • Italian Industrial Output for Sep 2017 (MoM) – Forecast -0.3%, versus+1.2% previous.
  • UK Industrial Production for Sep 2017 (MoM) – Forecast +0.3%, versus +0.2% previous.
  • UK Manufacturing Production for Sep 2017 (MoM) – Forecast +0.3%, versus +0.4% previous.
  • UK Trade Balance non-EU for Sep 2017 – Forecast £-4.500B, versus £-5.835B previous.
  • UK Goods Trade Balance for Sep 2017 – Forecast £-12.800B, versus £-14.245B previous.
  • Michigan Consumer Sentiment Index (Prelim) for Nov 2017 – Forecast 100.7, versus 100.7 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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