US dollar and the Euro seem like following same trading pattern against the Japanese yen, and looks like set for more gains in the near term.
Japanese Nomura/ JMMA Manufacturing Purchasing Manager Index registered a reading of 51.5 in February 2015, compared to the forecast of 52.6 and the last reading was of 52.1.
Market was less volatile as there was holiday in China due to the Chinese New year.
Important releases lined up during the London session, as the Euro area manufacturing and services PMI will be released by the Markit economics.
Manufacturing and services PMI will also be published for the Germany and Italy.
UK is also lined for a release as the retail sales data will published, which is expected to register a solid gain in January 2015.
US dollar is trading mixed, but mostly with a positive tone which might continue moving ahead.
The US dollar traded lower against the Japanese yen recently towards the 118.40 level where buyers managed to protect the downside in the near term. There is a bullish trend line on the 4 hour chart, which held the downside in the USDJPY pair. The 100 and 200 hour moving averages are also sitting around the same highlighted trend line. The most important point is that the pair decline stalled around the 50% fib retracement level of the last leg from the 116.83 low to 120.43 high. A break below the same might call for losses in the near term and could ignite bearish pressure moving ahead.
Intraday Support Level – 118.40
Intraday Resistance Level – 119.40
Overall, as long as the pair is above the stated trend line it might continue trading higher.
A break below the same could take the pair towards the 117.50 level.
If the USDJPY pair moves higher from the current levels, then initial resistance is around the 119.40 level. Any further gains might take the pair towards the 119.80 level where the US dollar sellers might appear in the near term. The 4hour RSI is above the 50 level, which is a positive sign in the short term.
The Euro traded higher against the Japanese yen, but it broadly struggled around the 200 simple moving average on the 4 hour chart. However, just like the USDJPY pair the EURJPY also has a bullish trend line on the 4 hour timeframe, which acted as a hurdle for the pair. The 100 4hour moving average is also sitting around the same area, which increases the importance of the highlighted support area. The 4hour RSI is also above the 50 level, which is a bullish sign in the near term.
Intraday Support Level – 135.00
Intraday Resistance Level – 135.80
Selling rallies around the 136.00 level line look like a good option.
A break above the same might call for more gains moving ahead.
On the downside, the highlighted trend line might continue to act as a catalyst for the pair where the Euro buyers could appear.
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