July 2, 2022
  • July 2, 2022

USD / JPY Technical Analysis: Bullish Channel Formation

By on May 4, 2021 0

It remains crucial for the USD / JPY to break through the resistance at 110.00 to strengthen the performance and the uptrend.

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The yen is a popular asset during times of turbulence.

The USD / JPY retracement gains this week pushed the pair towards resistance at 109.69 before settling around 109.45 as of this writing. The currency pair managed to profit from the positive reaction to the latest US economic data. The pair could stay in a narrow range until the details of the US jobs report are announced next Friday.

The USD / JPY remained stuck to its gains after yesterday’s comments from Federal Reserve Chairman Jerome Powell, in which he said the economic outlook “has improved” in the United States, but the recovery is still strong. very uneven with the downturn in income groups. In a speech yesterday, Powell highlighted a number of factors that have improved America’s growth prospects.

“We are not out of the danger phase yet, but I am happy to say that we are making real progress now,” Powell said in statements to the National Alliance for Community Reinvestment, noting higher levels of vaccinations, increased government support and more business reopening. “The economic downturn has not fallen on the shoulders of all Americans alike, and those least able to bear the burden have been hit the hardest.”

Growth in manufacturing activity in the United States unexpectedly slowed in April, according to a report released by the Institute of Supply Management. As a result, the ISM said the manufacturing PMI fell to 60.7 in April after hitting an over 37-year high of 64.7 in March. While a reading above the 50 level still indicates growth in industrial activity, economists expected the index to reach a reading of 65.0.

Commenting on the numbers, Timothy R. Fury, president of the ISM Manufacturing Business Survey, said: “Absenteeism, short-term closures due to partial shortages and difficulties in filling open jobs remain issues that limit the number of jobs. industry growth potential. “

The unexpected drop in the main index came as the production index fell to 62.5 in April from 68.1 in March and the new orders index fell to 64.3 from 68.0. The employment index also fell to 55.1 in April from 59.6 in March, indicating a slowdown in the pace of employment growth in the manufacturing sector. Meanwhile, the report showed the price index jumped to 89.6 in April from 85.6 in March, reaching its highest level since July 2008.

On Wednesday, the ISM will publish a separate report on the activity of the service sector during the month of April. The ISM Services PMI is expected to rise to 64.3 in April from 63.7 in March.

The World Health Organization is expected to decide this week to approve two Chinese vaccines for emergency use against COVID-19, a senior WHO official said. This approval will be the first time that a Chinese vaccine will be granted the United Nations Health Agency’s so-called emergency use list, and it will lead to a wider rollout of Chinese vaccines that are already used in some countries other than China.

Mariangela Simao, Assistant Director-General for Access to Medicines, Vaccines and Pharmaceuticals, says “final arrangements” still need to be made before the decisive word comes from WHO’s Technical Advisory Group on Vaccines Sinopharm and Cinofac. The World Health Organization has said it expects the Sinopharm vaccine decision to come first, and Sinovac after that.

Technical analysis of the pair:

Still crucial for USD / JPY to break through resistance at 110.00 to strengthen performance and uptrend, paving the way for buyers to move it to higher resistance levels. These gains may be threatened by the return of investors to buy safe havens in the event the Indian COVID strain spreads beyond its borders and curtail global efforts to vaccinate against the epidemic, or in the event the figures of jobs in the United States would fall short of expectations. .

Bears will regain control of the performance of the currency pair if it moves towards the support levels of 108.65 and 107.90. The currency pair will be affected by the announcement of trade balance figures and factory orders in the United States of America.