US Dollar / Japanese Yen (USD/JPY) gave up some of the yesterday’s gain on Wednesday, however, the pair is finding support around the old trendline resistance which is not acting as critical support level, later in the US session a few major economic releases about the US economy should provide clear direction to the pair.
As of this writing, USD/JPY is being traded near 102.14. The nearest support can be seen around 102.12 that is the trendline support, ahead of 101.80 which is 23.6% fib level. A break below 101.80 shall expose more downside movement towards 100.75.
On upside, the pair is expected to face the first hurdle around 102.50 which is 38.2% fib level ahead of 103.08 that is 50% fib level. A rebound is likely from 103.08. The bias will remain bearish as far as the pair is being traded below the 103.00 handle.
Both the Relative Strength Index (RSI) and the Commodity Channel Index (CCI) are showing neutral readings which means rallies and dips are likely in near future. No signs of divergence are being noted with MACD, the histogram of MACD is showing very thin volumes.
Today a number of important US economic releases are scheduled for release. First, the Mortgage Bankers Associate (MBA) will release the figure for mortgage applications received by different financial institutions during February. A high reading will be positive for USD/JPY and vice versa.
Similarly, the Institute of Supply Management (ISM) will release Non-Manufacturing or Services Purchasing Managers Index (PMI) for the US economy. According to the median forecast of various analysts, surveyed by Bloomberg, the activity in the services sector declined to 53.5 points in February as compared to 54 points in the month before. A better than expected actual outcome will be bullish for USD/JPY. Likewise, ADP Employment Change and Markit Services PMI are also due later in the US session.