On Thursday USD/JPY is trying to consolidate above the resistance of 136.50 with the subsequent retest of the local highs of December 20.
Yesterday's release of the US manufacturing sector indexes couldn't support the USD. According to S&P Global, the index declined from 47.8 to 47.3 in February, which was worse than expected. ISM registered an increase from 47.4 to 47.7, the forecast being 48.0p.
Japan consumer confidence index for February rose only 0.1 p. from 31.0 to 31.1 p. with a forecast of (+0.5) p. Total capital spending in the fourth quarter last year declined from 9.8% to 7.7%, which, however, was better than the forecast of 2.8%.
The Bank of Japan says it will test the digital yen in April. The tests will test different transaction options and the integration of electronic money into the national financial system. In a second phase, business entities will be included in the testing. Tests of the digital currency could take several years, regulators say. The electronic yen is being created as a supplement to traditional financial instruments, but it won't replace them.
Technical analysis of USD/JPY
Major forex indicators - Bollinger Bands and MACD are rising, keeping buy signals. Stochastic Oscillator is flying along the 80% line.
After confirmation of price fixation above 136.50, we form long positions with take profit of 138.50. Stop loss will be set at 135.57.
In case the price rebounds from 136.50, we'll wait for a breakthrough of support at 135.57, and then we'll open a sale with a target of 133.61. We place a stop loss at 136.50.