Key Points
- The US Dollar after trading above the 111.60 support for some time against the Japanese yen gained bids and traded higher.
- The USDJPY pair broke a major bearish trend line at 112.10 on the hourly chart, and might head towards another trend line on the upside.
- Today in Japan, the Machinery New orders figure was released by the Cabinet Office.
- The result was above the forecast, as there was an increase of 6.7% in Dec 2016, more than the forecast of 3.1%.
USDJPY Technical Analysis
The US Dollar after two failures near the 111.60-70 support area against the Japanese yen started to trade higher. It moved above the 23.6% Fib retracement level of the last decline from the 113.49 high to 111.60 low.
The pair also broke the 21 hourly simple moving average, and a major bearish trend line at 112.10 on the hourly chart. It is currently above the trend line and might head towards the next trend line at 112.55.
The 112.55 level is important as a resistance, since it also coincides with the 50% Fib retracement level of the last decline from the 113.49 high to 111.60 low.
Japanese Machinery New Orders
Today during the Asian session, the Machinery New orders, which are the total value of machinery orders placed at major manufacturers in Japan was released by the Cabinet Office. The market was expecting a rise of 3.1% in Dec 2016, compared with the previous month.
However, the result was above the forecast, as there was an increase of 6.7% in Dec 2016. The yearly change in the Machinery New orders was also positive, as there was a rise of 6.7% Dec 2016, compared with the same month a year ago. The forecast was of +4.6%, but it was lower compared with the last increase of 10.4%.
Overall, the US Dollar may be setting up for further gains vs the Japanese yen, but it needs to break the 112.50-60 resistance.
