USDJPY – A Look At The Daily Chart of Dollar To Yen
- The US Dollar may be setting up a short-term top near 118.60 against the Japanese yen.
- There were two bullish trend lines on the daily chart of USDJPY, which were broken to clear the doors for more losses towards 116.00.
- The Japanese Consumer Confidence released by the Cabinet Office recently posted a rise from 40.9 to 43.1 in Dec 2016.
- In the US, the NFIB Small Business Economic Trends Index posted an increase from 98.4 to 105.8 in Dec 2016.
USDJPY Technical Analysis
The US Dollar faced sellers near 118.50-118.60 area against the Japanese yen, and traded lower. The USDJPY pair broke a major support area, and may decline further going forward towards 115.00.
Looking at the daily chart of USDJPY, the pair broke 117.00 and two bullish trend lines. It cleared the way for more declines, and if the break is real, there can be a move towards the 23.6% Fib retracement level of the last wave from the 101.19 low to 118.66 high.
The last few daily candles look bearish and pointing downsides. On the upside, the 117.00 level may now act as a resistance area. The daily RSI has also reached the 50 level, and just holding it. So, a downside move if initiated may accelerate towards 115.00 in the near term.
Japanese Consumer Confidence
Recently, the Japanese Consumer Confidence, which captures the level of sentiment that individuals have in economic activity was released by the Cabinet Office. The market was expecting a rise from 40.9 to 41.3 in Dec 2016.
However, the result was positive, as there was a rise from 40.9 to 431 in Dec 2016. The categories of the Consumer Perception Indices (seasonally adjusted series), which changes in December are – Overall livelihood: 42.0 (up 1.9 from the previous month), Income growth: 41.9 (up 1.5 from the previous month), Employment: 45.7 (up 3.2 from the previous month) and Willingness to buy durable goods: 42.8 (up 2.3 from the previous month).
The market sentiment at the moment looks like favoring the Japanese yen. And, if the price action on the daily chart and break below 117.00 is real, there are chances of more declines in USDJPY towards 115.00.