- The rebound may only be temporary.
- A drop below the pivot point indicates further decline.
- ECB and US data should drive interest rates today.
The dollar/yen price hit yesterday’s low of 146.65 and started rising. Today, the pair rose to 147.87 but failed to test the psychological level of 148.00.
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Yesterday, the US dollar was helped by upbeat US economic data. Prices recovered and expansion was confirmed as the US flash manufacturing PMI reached 50.3 points, compared to the expected 47.6 points. Meanwhile, the Flash Services PMI rose from 51.4 points to 52.9 points, announcing further expansion.
Today, the European Central Bank needs to lead the market. The key refinance rate should remain at 4.50%, but sentiment could change depending on the monetary policy statement or ECB press conference.
Additionally, the US will release important economic data, so fundamentals could be decisive. Advance GDP is likely to announce a growth rate of 2.0%, which is lower compared to his 4.9% growth rate in the previous reporting period. Also released are unemployment claims, advance GDP price index, durable goods orders, core durable goods orders, and new home sales data. Tomorrow, Japan’s Tokyo Core CPI, Monetary Policy Meeting Minutes, and US Core PCE Price Index should move prices.
USD/JPY price technical analysis: new wave of selling
Technically, the USD/JPY price could not fall below the psychological level of 147.00. The two tried to retest the psychological level and median line (ml) of 148.00. After the previous decline, a rebound is widely expected.
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Rates were only able to retest key levels before dropping again. A return and stabilization below the weekly pivot point of 147.26 indicates further decline towards S1 (145.73).
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