Easter holidays are still hanging over Asia markets, and volumes will be constrained.
Japan kicks off the week with Tankan data and possible knock-on volatility from China’s Caixin PMIs.
The USD/JPY pair is jostling at the new week’s outset, trading near 106.30 heading into Tokyo’s Monday trading session.
The pair saw a brief flicker of activity, starting the new week near 106.15 before closing the gap and lifting to a pre-market high of 106.40 before bedding back down to wait for the week to get started.
Japan starts off the week with the Tankan Manufacturing Outlook and Index for the first quarter of 2018 at 23:50 GMT late Sunday. The Tankan Manufacturing Outlook for Q1 2018 is forecast to come in at 22 versus the previous 19, while the Tankan Manufacturing Index is slated for 25, in-line with the previous reading. At the same time the Tankan Large All Industry Capex will be printing, with the figure expected at 0.6 percent, a decline from the previous reading of 7.4 percent.
Action will likely be relatively sedate for Asia’s Monday trading with the Aussie and Kiwi markets both shuttered for the Easter Monday holiday, but China’s Caixin Manufacturing PMI at 01:45 could impact volatility.
USD/JPY Levels to consider
The Technical picture for the Yen’s week is still developing, and as FXStreet’s own Valeria Bednarik noted, “in the daily chart, the price remains far below its 100 and 200 SMAs, the shortest roughly 300 pips above the current level, while in the same chart, technical indicators lost upward strength and turned lower, to end in neutral territory, somehow indicating that buying interest remains subdued. In the 4 hours chart, the Momentum turned flat above its mid-line after correcting extreme overbought conditions reached mid-week, while the RSI heads south, around 53. The pair settled a handful of pips above a horizontal 100 SMA and was unable to hold on to gains above a bearish 200 SMA, but both moving averages are within a tight range, indicating that the previous bearish trend may be losing strength, quite logical considering the end of the Japanese fiscal year. While still not clear, the pair can start a recovery from here.”
Support levels: 105.95 105.60 105.20
Resistance levels: 106.40 106.80 107.10