The US Dollar likely completed a correction wave near 116.70 against the Japanese yen, and USDJPY now looks set for more upsides.
USDJPY Weekly Analysis – Dollar About To Climb Higher
· The US Dollar after facing sellers near 118.63 high declined and traded as low as 116.54 against the Japanese yen.
· There was a bearish trend line formed on the 4-hours chart of USDJPY, which was recently broken at 117.40.
· Recently in Japan, the Industrial Production released by the Ministry of Economy, Trade and Industry posted a rise of 1.5% in Nov 2016 (preliminary).
USDJPY Technical Analysis
The US Dollar after trading as high as 118.63 against the Japanese yen corrected lower, and traded as low as 116.54. The stated level was near the 50% Fib retracement level of the last wave from the 114.76 low to 118.63 high.
The USDJPY pair gained bids around the stated support area and started moving higher. During the upside, the pair broke a bearish trend line formed on the 4-hours chart at 117.40.
Overall, it looks like the pair has completed a correction wave, and may trade higher further. The most important resistance on the upside is near the 118.00 handle. A break above it might call for sustained gains in USDJPY.
Trade Idea – If you are looking to enter a buy trade, then consider it near the broken trend line with a stop of around 25 pips.
Recently in Japan, the Industrial Production report was released by the Ministry of Economy, Trade and Industry. The market was positioned for no major rise in the outputs of the Japanese factories and mines in Nov 2016, compared with the previous month. However, the result was higher, as there was a rise of 1.5% (preliminary).
When we have a look at the yearly change, there was a rise of 4.6% in Nov 2016, compared with the same month a year ago. This was a lot better, as the last reading was -1.4%.
However, it looks like the USD market sentiment is better, and take the USDJPY pair towards 118.00 in the near term.