USD/JPY Extends Decline, Overbought Condition Being Eased

USD/JPY continues to decline in today’s session, and is currently trading at 112.87, down 0.29% from Thursday’s North American close.

Near term support at the 20-day moving average has been broken, leaving the bias heading into next week to the downside. And, the 61.8% retracement level of the advance from the February low to the February high is being tested. Breaking below this level, a development which appears imminent, would call for a drop back down to the February lows, near 111.59.

On the upside, resistance is at the 20-day moving average, which comes in at the 113.30 level.

With the Stochastic producing a bearish cross on the daily chart, and still moving lower, the bias remains to the downside.

In today’s economic news, confidence among Japanese manufactures rose for a sixth straight month in February, to a 2-1/2 year high, but the services sector mood fell for the first time in four months, a Reuters poll showed, underscoring the export-led nature of the economic recovery.

The Reuters’ monthly poll-which tracks the Bank of Japan’s key quarterly tankan, found confidence at manufacturers falling over the next three months, and service-sector firms holding steady.

In US economic news today, leading indicators will be released at 10:00 ET.

USD/JPY Daily Chart

USDJPY_021717

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Tracy L. Morganthall, CMT, has been a Technical Market Analyst for more than 20 years. She has experience analyzing and producing reports on equities, both domestic and international markets, as well as Forex and commodities. She attended Trenton State College in Trenton, New Jersey, earning a Bachelor's in Finance.