The US Dollar decline against the Japanese Yen found support near 108.20. At the moment, the USDJPY pair is under a recovery, but can it continue to correct higher in the near term?
The pair recently broke the 23.6% Fib retracement level of the last decline from the 111.57 high to 108.13 low. However, the most important move was above a contracting triangle pattern at 108.80.
If the highlighted break is true, there are chances of more gains in the near term towards 110.00. However, a monster bearish trend line and previous support at 110.00 is waiting to act as a resistance.
In short, there can be more gains in USDJPY, but it is likely to face a lot of hurdles on the way up towards 110.00.
Earlier during the Asian session, the Japanese Nikkei Manufacturing PMI for April 2017 (Preliminary) was released. The market was positioned for an increase from the last reading of 52.4 to 52.6 in April 2017.
The result was above the forecast, as the Nikkei Manufacturing PMI posted a rise from 52.4 to 52.8 in April 2017. Commenting on the report, a Senior Economist at IHS Markit, Paul Smith, stated:
April’s PMI data signaled continued healthy growth of Japan’s manufacturing sector, and the latest results were again consistent with production rising at a quarterly rate of around 2%.
Overall, the result was positive, which is why there was a minor dip in USDJPY, but overall, the pair may soon climb back towards 109.50 in the near term.
More entries by This Author