USD/JPY Likely to Remain Bearish amid Low Empire State Manufacturing Index Reading

Japan – Preliminary GDP

On Sunday, at GMT 11:50 p.m., the Japanese Cabinet Office released the national quarter over quarter Preliminary GDP figure, which measures the changes in the value of all goods and service produced by the Japanese economy during the last quarter. This figure is usually published after adjusting inflation and it is considered as one of the key leading economic indicators.

Since the preliminary GDP figure is published first, it usually has the highest market impact. Hence, binary options traders consider it to be a leading indicator of the Japanese economy.

Last quarter, the Japanese Preliminary GDP came out at 0.3% and the forecast for this quarter was set at -0.3%. However, the actual figure came out slightly lower than what the market was expecting, at -0.4%.

United States – Empire State Manufacturing Index

Today, at GMT 1:30 p.m., the Federal Reserve Bank of New York released the empire state manufacturing index, which measures the level of a diffusion index by surveying 200 manufacturers in the state of New York.

Since businesses are the first to react to changing market conditions, USA binary options investors consider this survey to be an important leading indicator of New York’s economic health. As New York makes up a large portion of the US economy, it can signal a larger trend in the overall US economy.

Last month, the empire state manufacturing index reading came out at -19.4 and the forecast for this month was set at an optimistic reading of -10.5. However, the actual index reading came out much worse than what the market was expecting, at negative -16.6.

Trade Recommendation for the USD/JPY

USDJPYDaily

After reaching near the resistance level around 121.80 on January 29, the USD/JPY started a sharp downturn, which pushed the price towards the 111.00 level.

Last week, after reaching near 111.00, the USD/JPY started a retracement, and so far the pair has climbed around 400 pips. However, as the US empire estate manufacturing index reading came out much worse than expected, the fundamental outlook for the USD/JPY would likely remain bearish this week.

Under such circumstances, it would be recommended that binary options traders consider placing a PUT order for the USD/JPY with their binary options once the price closes below the 113.25 level.

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