Recently, USD/JPY has been trading in an impulsive manner with retracements that made the price reside below 111.00 price area. Despite worse economic reports this week, JPY managed to maintain the bearish pressure against USD since the pair has bounced off the 113.50 area. Today, Japan’s PPI report was published with a decrease in value to 3.1% from the previous value of 3.6% which was expected to be at 3.3% at least, but the worse result has not quite changed the market sentiment. Ahead of high impact upcoming economic reports from the US this week, JPY momentum is currently signalling an opposite price action in the coming days. Today, US Empire State Manufacturing Index report is going to be published which is expected to increase to 18.5 from the previous figure of 18.0. Though the economic report is expected to have less impact in the growth of USD, investors await a series of economic data to be published on Thursday, including Building Permits. As for the current scenario, JPY is expected to keep good momentum against USD in the future, as USD has less to offer to increase its gains in the coming days whereas the economic reports are also forecasted to have a negative impact on the USD growth. Moreover, good momentum in JPY over USD explains the severe weakness of USD in the process.
Now let us look at the technical chart. The price is currently holding below 111.00 resistance area. The USD/JPY pair is expected to decline much lower towards 109.20 support area in the coming days. A bit of correction along the way will not come as a surprise but a bearish bias is indeed quite strong. As the price remains below 111.00 with a daily close, the bearish bias is expected to continue further.
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