Over the long term and depending on the performance on the daily period chart, it appears that the US dollar against the yen is trading in the formation of a brutal ascending channel.
In light of the continued pressure on the US dollar, the USD / JPY in trading last week, retreated to the support level of 108.57. Attempts to rebound upwards failed to break above 109.33 resistance and stabilized at the start of this week’s trading around the 108.98 level. The US dollar gained at the end of the week against the rest of the major currencies, after IHS Markit said the US services sector PMI rose from a revised upward reading of 64.7 in April to a record high of 70.1 in May as more of the US economy reopened, leading to more activity and production in the sector.
Meanwhile, the US manufacturing PMI also hit a new high of 61.5 in May, down from 60.5 the month before, with both weights being estimated that the world’s largest economy is likely to have shifted to a higher level. Student. “The latest PMIs reinforce our view that the economy will continue to grow at a faster pace in the United States compared to the euro area over the next several years,” said Simona Gambarini of Capital Economics. This fuels our expectations that long-term yields will rise faster in the past than in the past and that the Euro will fall against the US dollar.
All in all, the strong US recovery is ultimately a boon to the economies of the rest of the world as well as their currencies, despite a surge in US government bond yields on Friday and the day after issuance and a seemed to quickly catalyze another rally.
Prior to this publication, initial jobless claims in the United States were better than expected at 444k from 450k. However, the Philadelphia Manufacturing PMI is disappointing at 31.5 versus an expectation of 43.
From Japan, the BOJ’s preliminary manufacturing PMI for May missed the forecast of 53.8 with a change of 52.5. The National Consumer Price Index excluding food and energy was 0.5% lower than the expected change (year over year) with a change of -0.2%. In contrast, the national consumer price index exceeded -0.2%, by -0.1%.
At the end of last week, Japan extended a state of emergency linked to the Corona virus, hours after approving the use of two other vaccines in an attempt to contain a worrying increase in infections nine weeks before the opening of the Tokyo Olympics. While there is no forced shutdown, the state of emergency allows county governors to demand stores and public institutions to close or reduce their working hours. It spread from the hot spots of Osaka and Tokyo in late April to other areas earlier this month, and currently covers 42% of the Japanese population.
Last Friday, the government announced a decision to add Okinawa, the southern archipelago that hosts most of the US military forces stationed in Japan, from Sunday. Earlier on Friday, Japan agreed to produce and use the Moderna and AstraZeneca vaccines. In this regard, Minister of Health Norihisa Tamura said that both vaccines will help speed up vaccination. Japan has given one or more doses of the vaccine to around 5 million people, or just 4% of the population, with the doses of Pfizer that were approved in February.
From the technical analysis of the pair: In the short term and based on the performance of the hourly chart, it appears that the US dollar against the yen is trading in the formation of a descending channel. This indicates significant short-term downward momentum in market sentiment. The pair recently rebounded to rise near overbought levels in the 2pm RSI. As a result, the bulls will look to act on the impact of this rebound by targeting profits around 109.18 or higher at 109.48. On the other hand, bears will aim for short term gains around the 108.65 support level or below the 108.34 support level.
Over the long term and based on the performance of the daily chart, it appears that the US dollar against the yen is trading in the formation of a brutal ascending channel. This indicates strong long-term bullish momentum in market sentiment. The pair recently pulled back to avoid climbing to overbought levels in the 14-day RSI. Therefore, bears will target long term pullback gains around 107.71 support or less at 106.55 support. On the other hand, the bulls will look for profit at around 109.82 resistance or higher at 110.78 resistance.