Today we direct our attention to the USD/JPY pair as we expect some news with the propensity to increase the volatility of this pair. First of all, on Japan’s side we have the preliminary Machine Tools Orders report which is a significant indicator of the economy’s health. From the United States we are awaiting a few different statistics - the ten-year bond auction, job openings information, and the NFIB Small Business Index. Since the news in each country can affect the national currency, we can expect some volatility in the exchange rate between the two.
What to watch out for: Pay attention to how the USD/JPY is behaving on the daily chart. Particularly, keep an eye on the levels of resistance at 110.93 and 111.14, as well as the supports at 110.66, 110.44, and 110.22. As of the moment of this article’s publication, the pair is trading around 110.63, right below the first level of support. The RSI and MACD indicators are all showing a sell sign, so today we can be confident in choosing to sell the pair. In general the Japanese authorities have been taking measures to encourage inflation, i.e. decreasing the value of the yen a little, so we can expect a bearish outlook for the pair.
