USD/JPY Looks to Continue Downtrend if Key Support Level is Broken

United States – Building Permits

Tomorrow, at GMT 12:30 p.m., the US Census Bureau will release the Building Permits figure, which is an annualized number of new building permits for the residential housing sector issued during the last month.

Since getting a building permit usually indicate future construction work, binary options traders consider this data to be a leading indicator of the overall economic activity in the country.

Last month, 1.18 million building permits were issued and this month, analysts are expecting the figure to come out around 1.20 million.

Japan – Tertiary Industry Activity

On Friday, at GMT 4:30 a.m., the Japanese Ministry of Economy, Trade and Industry will release the month over month tertiary industry activity figure, which measures the changes in the total value of services bought by tertiary businesses in Japan.

Since Japanese businesses increase their purchases of various services in order to expand their business when they feel optimistic, the tertiary industry activity figure is considered by US binary options investors as a leading indicator of the overall Japanese economy.

Last month, the Japanese tertiary industry activity went up by 1.5%, and the forecast for this month is currently set at a decline of -0.4%.

Trade Recommendation for the USD/JPY

USDJPYDaily

Since November 2015, the USD/JPY remained in the strong downtrend, and last week, the price broke below the previous range, where the low was at 110.90. Since breaking this key support, the USD/JPY price had fallen to as low as 107.60.

As the building permits in the United States is expected to rise this month, and the Japanese tertiary industry activity is expected to decline, the fundamental outlook for the USD/JPY would likely remain bullish this week.

However, given the strong downtrend the pair remained for last several months, there is a good chance that it would remain bearish if the key support around the 107.60 level is penetrated.

Hence, it would be recommended that binary options traders stay with the trend and consider placing a PUT order for the USD/JPY with their binary options brokers once the price closes below the 107.60 level.

Recommended Broker for US traders: Finpari

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