Key Points
- The US Dollar after trading as high as 110.60 moved down vs the Japanese yen.
- The USDJPY pair also broke a bullish trend line formed on the hourly chart, which opened the way for more declines.
- Japanese Nikkei Manufacturing PMI released during the Asian session posted a decline from 48.2 to 47.6 in May 2016 (preliminary).
- The All Industry Activity Index released by the Ministry of Economy, Trade and Industry posted an increase of 0.1% in March 2016, less than the forecast of 0.7%.
Technical Analysis
The US Dollar weakened today vs the Japanese yen despite of poor economic data in Japan. There was a bullish trend line formed on the hourly chart of the USDJPY pair, which was broken during the downside move.
The pair also settled below the 100 and 50 hourly simple moving average, which may act as a resistance if USDJPY attempts to recover.
On the downside, the 200 hourly SMA may act as a support area for the USD bulls moving ahead.
Japan’s All Industry Activity Index
Earlier during the Asian session, the Japanese All Industry Activity Index, which captures the monthly change in overall production by all industries of the Japanese economy was released by the Ministry of Economy, Trade and Industry. The forecast was slated for a rise of 0.7% in the index in March 2016, compared with the previous month.
However, the outcome was a bit lower, as the Japanese All Industry Activity Index increased only 0.1%. Moreover, the Japanese Nikkei Manufacturing PMI also posted a decline from 48.2 to 47.6 in May 2016 (preliminary), and missed the forecast.
Overall, it looks like there is a chance of more losses in the near term in USDJPY if the current trend remains intact.
