Key Highlights
- The US Dollar declined heavily this month and moved below 112.00 against the Japanese Yen.
- There are a few bearish trend lines with resistances as 111.65, 112.10 and 112.35 on the 4-hours chart of USD/JPY.
- Japan’s Nikkei Manufacturing PMI in Nov 2017 (Preliminary) posted a rise from 52.8 to 53.8.
- The US Manufacturing PMI for Nov 2017 (Preliminary) will be released today, which is forecasted to increase from 54.6 to 54.8.
USDJPY Technical Analysis
The US Dollar started a major downtrend from the 114.70 swing high against the Japanese Yen. The USD/JPY pair is now below 112.00 and struggling to recover or correct higher.
During the recent slide, the pair broke a few important support levels such as 112.80 and 112.00. It traded as low as 111.06 recently and is currently trading in a range.
An initial resistance is around the 23.6% Fib retracement level of the last decline from the 112.70 high to 111.06 low. To the topside, there are a few bearish trend lines with resistances as 111.65, 112.10 and 112.35 on the 4-hours chart.
Therefore, any major correction from the current levels is likely to face sellers near 112.00 and 112.35 in the near term.
Japan’s Nikkei Manufacturing PMI
Today in Japan, the Preliminary reading of the Nikkei Manufacturing PMI for Nov 2017 was released. The market was looking for a decline in the PMI from 52.8 to 52.6.
However, the actual result was better than the forecast, as there was a rise in the PMI to 53.8 in Nov 2017. Moreover, the Manufacturing Output Index posted the strongest expansion reading for 45 months and came in at 54.2.
Commenting on the report, an Economist at IHS Markit, Joe Hayes, stated:
Following the softer Q3 GDP figure last week, November flash PMI data signalled the strongest improvement in the manufacturing sector for 44 month. New orders increased strongly, underpinned by business from abroad amid recent yen weakness.
The USD/JPY pair remains in a downtrend and a correction towards 112.00 will most likely face sellers in the near term.
Economic Releases to Watch Today
German IFO Business Climate Index for Nov 2017 – Forecast 116.5, versus 116.7 previous.
US Manufacturing PMI for Nov 2017 (Preliminary) – Forecast 54.8, versus 54.6 previous.
US Services PMI for Nov 2017 (Preliminary) – Forecast 55.5, versus 55.3 previous.
