USD/JPY Downtrend Would Probably Continue as Japanese PPI Came Close to Forecast

USD/JPY – Technical Analysis for US Binary Options Brokers

Japan – Producer Price Index (PPI)

Today, at GMT 11.50 p.m., the Bank of Japan released the month-over-month Producer Price Index (PPI), which measures the changes in the price of goods and raw materials bought by Japanese manufacturers during the previous month.

Binary options traders consider the Japanese Producer Price Index (PPI) to be a leading indicator of the consumer inflation because any substantial increase in the raw materials is passed on to the buyers of the finished products by manufacturers. Hence, an increase in PPI indicates rising prices at the consumer level, which contributes to overall national inflation.

Last month, the Japanese PPI (m/m) increased by 2.1% and the forecast for this month was set at an increase of 2.2%. However, the actual figure came out slightly lower, at 2.1% increase.

United States – Retail Sales

On Wednesday, at GMT 12:30 p.m., the US Census Bureau will release the national month-over-month retail sales figure, which measures the changes in the total value of all sales made at the retail level in the country over the past month.

Retail sales data are considered by binary options investors to be the primary gauge of consumer spending and confidence. This is because when consumers are confident about their future financial situation, they tend to spend more.

Last month, the US retail sales value increased by 0.4% and the forecast for this month is that it would likely increase by an additional 0.1%.

USD/JPY Forecast

Since early January 2017, the USD/JPY remained on a strong downtrend that has pushed the price by around 1030 pips over the last six months. However, as soon as the USD/JPY reached near the 108.15 level, it found a strong support and the pair started a bullish retracement, which broke above the downtrend line on May 4, 2017.

Although the downtrend line was broken last month, the USD/JPY once again turned bearish within a week and so far, appears to have resumed the downtrend. Currently, the minor support near 109.10 is holding the USD/JPY from going further down.

As the Japanese PPI came close to the forecast, but the US retail sales figure is expected to only increase by 0.1%, a significant drop against last month’s 0.4%, we believe the fundamental outlook for the USD/JPY would likely remain bearish this week. Therefore, if the USD/JPY breaks below the support level around 109.10, it would likely find additional bearish momentum in the market.

Hence, US binary options traders should look out for trading opportunities below this major support level around 109.10.

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