USD/JPY - US Dollar Nosedives Below Key Support Vs Japanese Yen
The US Dollar started a major downtrend from 110.60 against the Japanese Yen. The USD/JPY pair recently broke a crucial support at 108.50, opening the doors for more losses.
The 4 hours chart of USD/JPY clearly highlights a major bear leg starting from the 110.60 high. The pair declined towards 108.50 where buyers tried hard to prevent further declines. There was even a correction towards 109.40, but two bearish trend lines disallowed further gains.
As a result, the pair declined and also cleared the 108.50 support area. A new two month low was formed recently at 107.61 from where there can be a minor correction.
However, the broken support at 108.50 would now act as a strong resistance. Both trend lines and the 50% Fib retracement level of the last drop from the 109.39 high to 107.61 low are also positioned near 108.50.Japan’s Gross Domestic Product
Today, Japan saw a couple of key economic releases like the Gross Domestic Product and Current Account Balance. The Gross Domestic Product for Q2 2017 was released by the Cabinet Office.
The forecast was slated for an increase of 0.7% in the GDP compared with the previous quarter. However, the actual result was on the lower side, as there was an increase of 0.6% in the GDP. The yearly change was also disappointing, as there was an increase of 2.5%, less than the forecast of 2.9%.
The Current Account report for July 2017 was released today by the by the Ministry of Finance. The market was looking for a trade surplus of ¥2,058.6B, more than the last ¥934.6B.
However, the actual was positive, as the trade surplus was ¥2,320.0B in July 2017. Overall, the result was not what the market expected, which could prompt a correction in USD/JPY towards 108.20 30 in the near term.Economic Releases to Watch Today US Wholesale Inventories for July 2017 – Forecast +0.4%, versus +0.4% previous. Canada’s Net Change in Employment August 2017 – Forecast 19.0K, versus 10.9K previous. Canada’s Unemployment Rate August 2017 – Forecast 6.3%, versus 6.3% previous.