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USDJPY – US Dollar Upsides Capped By 110.20 Vs Japanese Yen

Key Points

  • The US Dollar moved down recently and traded below 109.80 against the Japanese Yen.
  • There is a short-term breakout pattern forming with resistance near 110.20 on the hourly chart of the USD/JPY pair.
  • Today in Japan, the Domestic Corporate Goods Price Index for July 2017 was released by the Bank of Japan.
  • The outcome was above the forecast, as there was an increase of 0.3% in the index (MoM).

USDJPY Technical Analysis

The US Dollar after trading above the 111.00 level found sellers against the Japanese Yen and started a downside move. The USD/JPY pair declined and moved below 110.50, 110.00 and the 21 hourly simple moving average.

USDJPY Technical Analysis

There pair traded as low as 109.56 before starting a recovery. The pair is currently above the 23.6% Fib retracement level of the last decline from the 110.83 high to 109.56 low.

On the upside, there is a short-term breakout pattern forming with resistance near 110.20 on the hourly chart of the USD/JPY pair. The breakout pattern resistance is near the 21 hourly simple moving average at 110.10. So, any major gains above 110.10-20 won’t be easy in the near term.

Japan’s Domestic Corporate Goods Price Index

Today in Japan, the Domestic Corporate Goods Price Index for July 2017 was released by the Bank of Japan. The market was positioned for an increase of 0.2% in the index compared with the previous month.

The actual result was above the forecast, as there was an increase of 0.3% in the index. In terms of the yearly change, the Domestic Corporate Goods Price Index increased 2.6%, which was a lot more than the forecast of 2.4%. It was also more than the last revised reading of 2.2%

Overall, the USDJPY pair may correct higher, but upsides are likely to be capped by the 110.20 or 110.40 levels.

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