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The US dollar weakened recently against a few major currencies, including the Japanese yen. The FOMC meeting minutes came as a disappointment for the US dollar as it was on the dovish side whereas the market was expecting hawkish. There were some important releases lined up in Japan. The Japanese Merchandise Trade Balance Total was released by the Ministry of Finance, which was above the forecast. The expectation was of ¥-1,691.0B, but it came in at ¥-1,177.5B. Moreover, the Adjusted Merchandise Trade Balance was also released, which came in at ¥-406.124B, down from the last revised reading of ¥-620.667B. Overall, the data was on the positive side, and helped the USDJPY pair.

There was a major bullish trend line formed on the hourly chart of the USDJPY pair, which was breached after the release. The downside was swift after the events and the pair moved towards the 118.42 low. The pair even cleared the 100 hour moving average, which is likely to act as a resistance for the pair in the short term. The pair is currently correcting higher and moving towards the 38.2% fib retracement level of the last leg from the 119.40 high to 118.42 low, which also coincides with the 100 hour MA. So, the 118.80 level might act as a resistance for the pair moving ahead.

If the USDJPY pair moves lower from the current levels, then the last low of 118.42 might come into play again where we could witness a reaction.

Overall, one might consider selling rallies in the USDJPY pair as long as it is trading below the 100 hour MA.

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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com