Key Points
- The US Dollar made a downside move against the Japanese yen, and broke the support 117.30.
- The USDJPY pair went down, and also broke a bullish trend line on the hourly chart at 117.40.
- In Japan today, the Services Purchasing Managers Index (PMI) was released by Markit Economics.
- The result was above the forecast, as there was a rise from the last reading of 51.8 to 52.3 in Dec 2016.
USDJPY Technical Analysis
The US Dollar made a downside move against the Japanese yen, and broke a couple of important support levels at 117.30 and 117.40. There was even a break below a bullish trend line on the hourly chart at 117.4.
The pair also went below the 21 hourly simple moving average, which is a bearish sign. The pair is currently gaining bids near 115.60.
The pair may correct higher, but likely to face sellers near the 38.2% Fib retracement level of the last drop from the 117.75 high to 115.58 low.
Japanese Services PMI
Today in Japan, the Japanese Services Purchasing Managers Index (PMI), which captures business conditions in the services sector was released by Markit Economics. The market was aligned for no major change from the last reading of 51.8.
The result was above the forecast, as there was a rise from the last reading of 51.8 to 52.3 in Dec 2016. The report added that the headline seasonally adjusted Business Activity Index posted 52.3 in December, up from 51.8 in November, signalling a stronger expansion in activity at Japanese service providers. Moreover, the latest reading was the highest since January and contributed to the highest quarterly average since Q4 2015. According to panellists, greater new work inflows and successful gains in new customers were factors behind the increase in output”.
Overall, the Japanese yen may gain against the US Dollar in the short term, and USDJPY could test the 115.20 support.
