Key Points
- The US Dollar rocketed higher against the Japanese yen, as Japan’s Prime Minister Shinzo Abe’s ruling coalition increased its numbers in the upper house elections on Sunday.
- The USDJPY pair broke a major bearish trend line formed on the hourly chart to break the 200 hourly simple moving average.
- In Japan, the Machinery New orders, released by the Cabinet Office posted a decline of 1.4% in May 2016.
- In terms of the yearly change, the Machinery New orders declined 11.7%.
Technical Analysis
The US Dollar gained heavily against the Japanese yen recently, and traded above the 102.00 resistance area. During the upside move, the USDJPY pair broke a major bearish trend line formed on the hourly chart.
Moreover, the pair also closed above the 100 and 200 hourly simple moving average, which is a bullish sign for USDJPY in the short term.
There are high chances of the pair trading further higher, and on the downside, the 200 hourly SMA can be seen as a support area.
Japanese Machinery New orders
Earlier today, the Japanese Machinery New orders figure, which are the total value of machinery orders placed at major manufacturers in Japan was released by the Cabinet Office. The outcome was disappointing, as the orders fell 1.4% in May 2016, compared with the previous month.
When we have a look as the yearly change, then the Japanese Machinery New orders declined by 11.7%, which was more than the forecast of 8.7%. Overall, the report missed the expectation, which increased the bearish pressure on the Japanese yen.
It looks like the USDJPY pair may continue to trade higher, and may even challenge the 76.4% Fib retracement level of the last drop from the 103.40 high to 100.00 low.
