Fundamental Analysis of USD/JPY for March 6, 2018

USD/JPY has been quite impulsive with the bullish gains recently after bouncing off the important support area of 105.50. JPY has been quite positive with the recent economic reports like significant decrease in Unemployment Rate from 2.8% to 2.4%, which made the currency to gain significant momentum along the way against USD. Ahead of the upcoming high impact economic reports on the USD side this week and probable Interest Rate Hike this month, USD is currently recovering quite well from the impulsive JPY strike. Today, USD Factory Orders report is going to be published which is expected to decrease to -0.4% from the previous positive value of 1.7%, and IBD/TIPP Economic Optimism report is expected to increase to 58.2 from the previous figure of 56.7. Ahead of the upcoming Non-Farm Employment Change, Average Hourly Earnings, and Unemployment Rate report, USD is expected to gain certain momentum which may lead to further bullish pressure in the pair. Today, we do not have any JPY economic report to impact the market but on Thursday, JPY Bank Lending report is going to be published which is expected to be unchanged at 2.4%, Current Account is expected to increase to 1.76T from the previous figure of 1.48T, Final GDP Price Index is expected to be unchanged at 0.0%, and Final GDP is expected to increase to 0.2% from the previous value of 0.1%. As of the current scenario, this week the market is expected to be quite volatile whereas a number of high impact economic reports on the both sides are expected to inject uncertainty for the time being. To sum up, ahead of the upcoming economic reports, USD is expected to gain and sustain the bullish momentum in the pair if the economic reports are published better than expected by Friday daily close.

Now let us look at the technical view. The price has been quite impulsive with the gains yesterday having bouncing off the 105.50 price area. The bearish trend has been quite non-volatile whereas certain retracement towards the 20 EMA and 107.30-50 area is expected before the price continues its bearish pressure in the coming days. As the price remains below the 108.50 price area, the bearish bias is expected to continue further.

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