- Summary:
- The USDJPY pair rose after the weak economic data from Japan, But a technical analyss shows that the downward trend is still intact today.
The USDJPY pair rose slightly as investors reacted to the latest Japanese trade and machinery order numbers. It is trading at 105.57, which is a few pips above the yesterday’s low of 105.40.
According to the Japanese government, exports declined by 19.2% in July. That was the 10th consecutive month that exports from the country have declined. But it was better than the decline of 21.0% that analysts were expecting. Meanwhile, imports declined by more than 22% in July, which was better than the expected decline of 22.8%. As a result, the country’s trade surplus expanded to more than 11 billion yen.
The important machinery orders also declined in June. The core machinery orders fell by 22.5% on a year-on-year basis. That was lower than the previous decline of 16.3%. It was also worse than the 17.6% decline that analysts were expecting.
USDJPY technical outlook
The USDJPY has been in a strong downward trend in the past three days. This decline has mostly been because of the overall weakness of the US dollar. Indeed, the dollar index has dropped by more than 2% in the past few days alone.
On the daily chart, we see that the USDJPY pair formed a three black crows pattern yesterday. This is formed when a pair declines for three consecutive days. The price is also slightly below the 50-day and 100-day simple moving averages while the RSI has been falling. Therefore, even with the today’s bounce, it seems like bears are still in control, which means that the price is likely to continue falling as bears target the next support at 105.00.
On the flip side, a move above 106.00 will invalidate the bearish thesis. Since this is a strong psychological level, it will send a signal that there are still more buyers in the market.
USDJPY technical outlook
