The USD/JPY price dropped in the American session even as the US dollar bounced back. The pair dropped to an intraday low of 105.83, which is slightly lower than yesterday’s high of 106.21.
USD/JPY news: In a report earlier today, the Japanese Ministry of Finance said that the core machinery orders rose by 5.2% in December after they rose by 1.5% in the previous month. This increase was better than the median estimate of a 6.2% drop. On an annualised basis, the orders rose by 11.8%, a better performance than the previous decline of 11.3%.
The office also released relatively mixed trade numbers. The country’s exports increased by 6.4% in January after rising by 2.0% in the previous month. Imports, on the other hand, dropped by 9.5% after falling by 11.6%. This pushed the trade deficit widened to more than ¥323 billion yen.
The USD/JPY pair dropped to a low of 105.88 earlier today. This was 0.35% below the monthly high of 106.23. The price was also slightly above the February 21 high of 105.77. On the hourly chart, the price has moved below the 25-day EMA while the RSI has continued to move lower. Further, the price had formed a cup and handle pattern.
Therefore, while the price may fall slightly, the overall trend remains bullish. As such, there is a possibility that it will move above 106.00 later today. However, a further drop below 105.7 will invalidate this prediction.