Key Points
- The US Dollar is under heavy selling pressure and trading below 110.00 against the Japanese Yen.
- There it a monster bearish trend line forming with resistance at 109.60 on the hourly chart of USDJPY.
- Today in Japan, the preliminary Leading Economic Index for April 2017 was released by the Cabinet Office.
- The outcome was below the forecast, as the index is expected to post a decline from the last revised reading of 105.7 to 104.5.
USDJPY Technical Analysis
The US Dollar declined heavily recently and moved below the 110.20 and 110.00 support levels against the Japanese Yen. The USDJPY pair traded as low as 109.26 where it is finding support and currently attempting an upside break.
On the topside, there is a monster bearish trend line forming with resistance at 109.60 on the hourly chart. The trend line also coincides with the 23.6% Fib retracement level of the last decline from the 110.76 high to 109.26 low.
Above the trend line resistance at 109.60, the next hurdle is around the 21 hourly simple moving average at 110.00. It is also the 50% Fib retracement level of the last decline from the 110.76 high to 109.26 low. So, it won’t be easy for buyers to break the 110.00 resistance once there is a close above 109.60.
Japan’s Leading Economic Index
Recently in Japan, the preliminary Leading Economic Index for April 2017 was released by the Cabinet Office. The market was positioned for no major decline in the index from the last reading of 105.5.
The result was below the forecast, as the index is expected to post a decline to 104.5, and the last reading was revised up from 105.5 to 105.7. On the other hand, the Coincident Index preliminary reading posted an increase from 114.4 to 117.7 in April 2017.
Overall, there are high chances of USDJPY gaining bullish momentum once there is a break above the 109.60-65 resistance.
