Key Points
- The US Dollar looks like following a bullish trend against the Japanese yen, and may continue to rise.
- There is a major bullish trend line formed on the hourly chart of the USDJPY pair, which is acting as a support.
- The Japanese Leading Economic Index released by the Cabinet Office posted a decline from 100 to 99.7 in May 2016.
- The Japanese Coincident Index also declined from the last revised reading of 112 to 109.9 in May 2016.
Technical Analysis
The US dollar suffered losses against the Japanese yen this past week, but it later managed to recover. There is a major bullish trend line formed on the hourly chart of the USDJPY pair, which provided support and acting as a hurdle for the sellers.
Moreover, the pair is above the 21 hourly simple moving average, which is a sign that there is a major support on the downside.
One may keep looking to enter a buy trade as long as the pair is above the 21 hourly SMA.
Japanese Leading Economic Index
Today in Japan, the Leading Economic Index, which is an economic indicator that consists of 12 indexes such as account inventory ratios, machinery orders, stock prices and other leading economic indicators was released by the Cabinet Office.
The market was not expecting any decline in May 2016 from 100.00. However, as per the report, there was a decline from 100 to 99.7 in May 2016. Moreover, the Japanese Coincident Index, which is a single summary statistic that tracks the current state of the Japanese economy also declined from the last revised reading of 112 to 109.9 in May 2016.
Overall, the recent data was not in favor of the Japanese yen bulls, which may result in more gains in the USDJPY pair.
