Yesterday’s trade saw USD/JPY within the range of 118.37-119.63. The daily high has also been the highest level since January 9th, when a high of 119.91 was recorded. The pair closed at 119.43, gaining 0.67% on a daily basis.
At 10:28 GMT today USD/JPY was up 0.30% for the day to trade at 119.79. The pair touched a daily high at 119.87 at 10:36 GMT.
Fundamentals
United States
Monthly Budget Statement
The United States probably recorded a government budget deficit of USD 10.0 billion in January, according to expectations, after a surplus of USD 2.0 billion during the previous month. If so, this would be the lowest deficit figure since December 2012, when the gap amounted to USD 1.2 billion.
A lesser-than-projected deficit would have a certain bullish effect on the greenback. The Financial Management Service, US Treasury is to publish the official figure at 19:00 GMT.
Japan
Machinery Orders
Machinery Orders in Japan probably increased 2.4% in December compared to a month ago, according to market expectations, after in November compared to October the indicator rose 1.3%. In annual terms, new orders, placed at major manufacturers in Japan, probably increased 5.9% in December, following a 14.6% drop in November. The latter has been the largest annual decrease in more than three years.
Machinery orders are considered as an excellent leading indicator, providing clues over business capital spending in Japan. An increase in new orders suggests that business confidence has gained strength, which can also trigger higher expectations over the nations economic growth. Therefore, in case new orders increased at a faster-than-anticipated pace, this would provide support to the Japanese yen. Japans Cabinet Office will release the official report at 23:50 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 119.14. In case USD/JPY manages to breach the first resistance level at 119.92, it will probably continue up to test 120.40. In case the second key resistance is broken, the pair will probably attempt to advance to 121.18.
If USD/JPY manages to breach the first key support at 118.66, it will probably continue to slide and test 117.88. With this second key support broken, the movement to the downside will probably continue to 117.40.
The mid-Pivot levels for Monday are as follows: M1 – 117.64, M2 – 118.27, M3 – 118.90, M4 – 119.53, M5 – 120.16, M6 – 120.79.
In weekly terms, the central pivot point is at 118.29. The three key resistance levels are as follows: R1 – 119.93, R2 – 120.88, R3 – 122.52. The three key support levels are: S1 – 117.34, S2 – 115.70, S3 – 114.75.
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