USD/JPY Forecast — US Dollar Approaching Key Break Vs Japanese Yen

• - The US Dollar is trading with a positive bias above the 109.00 level against the Japanese Yen.
• - There is a key bullish trend line forming with support at 109.20 on the hourly chart of the USD/JPY pair.
• - Recently in Japan, the Nikkei Manufacturing PMI (final reading) for April 2018 was published.
• - The outcome was above the market forecast of 53.3 as there was a rise in the PMI from 53.3 to 53.8.

Japan’s Nikkei Manufacturing PMI

Recently in Japan, the Nikkei Manufacturing PMI (final reading) for April 2018 was published. The market was positioned for no change in the PMI from the last reading of 53.3.

The result was above the market forecast of 53.3 as there was a rise in the PMI from 53.3 to 53.8. More importantly, Output growth quickens to three-month high in April 2018. The report added:

A twenty-first consecutive month of rising production in the Japanese manufacturing sector was recorded in April. The rate of growth in output was solid overall and the fastest since January.

The USD/JPY pair remains in an uptrend and it seems like the pair is approaching a crucial upside break above 109.50 in the near term.

USD/JPY Technical Analysis

The US Dollar started a decent upside move from the 107.60 swing low against the Japanese Yen. The USD/JPY pair traded higher and broke many hurdles such as 108.00 and 109.00 to settle above the 100 hourly simple moving average.

The pair recently traded as high as 109.54 before starting a downside correction. It declined below the 38.2% Fib retracement level of the last wave from the 108.53 low to 109.54 high. However, the decline was protected by the 109.00 support and the 50% Fib retracement level of the last wave from the 108.53 low to 109.54 high.

It seems like the pair is forming a breakout pattern with resistance near 109.50 and support at 109.00. There is also a key bullish trend line forming with support at 109.20 on the hourly chart of the USD/JPY pair.

The current price action suggests that the pair is likely to move above the 109.50 resistance to register further gains in the near term. The next hurdle on the upside is at 110.00.

Originally published at ForexGator.com.