USDJPY Buyers Facing Uphill Task

By fxtimes.com

Technical Bias: Bullish

Key Points

• US Dollar moved lower against the Japanese Yen and cleared an important support area.
• Japanese Trade Balance released by the Customs Office posted a trade surplus of ¥102.6B, compared with the deficit of ¥-47.3B.
• Japanese Consumer Confidence that captures the level of sentiment that individuals have in economic activity declined to 40.3.
• Japanese Eco Watchers Survey released by the Cabinet Office increased to 51.6 from 51.0 in July 2015.
• USDJPY buyers facing a major resistance area in the form of a broken trend line.

Technical Analysis

The US Dollar traded lower after this past week’s NFP release against the Japanese Yen. The USDJPY pair downside reaction was crucial, as sellers managed to clear an important bullish trend line on the hourly chart to open the doors for more losses. The pair traded as low as 124.09 where buyers managed to hold the downside. One key point to note is the fact that the 200 hourly simple moving average was the main factor to prevent more losses around 124.00-10.

The pair is currently attempting to correct higher, but facing a major resistance around the broken trend line. The highlighted trend line is also coinciding with the 38.2% Fib retracement level of the last drop from the 125.05 high to 124.09 low.

Overall, a failure to settle above 125.60 might call for a move lower.

Japanese Eco Watchers Survey

Earlier during the Asian session, the Japanese Eco Watchers Survey, which closely watches region-by-region economic trends and is considered as basic material for assessing short-term economic trends in Japan was released by the Cabinet Office. The forecast was lined up for an increase from the last reading of 51.0 to 53.1 in July 2015. However, the outcome was just below the forecast, as the Japanese Eco Watchers Survey Current came in at 51.6.

Trade Idea

Selling rallies around 125.60 is a nice option in the near term.

 

By fxtimes.com