USD strengthens across the board

12 July, 2018

The USD has been the strongest mover today as it looked to fly up the charts on the back of global uncertainty and on the back of positive economic data. PPI data m/m was above expectations of 0.2%, coming in strongly at 0.3%. This helped push the Y/Y on figure to 2.8% (2.6% exp), which shows that despite the turmoil there is still some economic strength in the dollar. The USD bulls will now be focused on tomorrows CPI reading which will carry a lot of weight with the market, as bulls will be hoping for a hawkish signal in the form of a better than expected reading. Anything below expectations could lead to a potentially dovish stance and the risk of a rate cut coming off the table - if it was to signal a long term slow down for inflation. Despite all of this the USD is the big mover and tomorrow will certainly be another big day for it.

Looking at the USDJPY, it has been for me the big mover, and has finally gained some strong traction after a few weeks of toying with the idea. The push up to resistance at 112.033 for me is a strong bullish signal and I will be looking to see if it can make the next extension of 112.862. If the bears are to make a swipe and come back into a bullish market then support at 111.083 will be their first target in the short term. Below this there is a potential trend line as well that markets could potentially be focused on to defend, but it has already come under some pressure and we could see an extension down to the next level of support at 109.986. So for the USDJPY bulls they will be keenly focused on the upside of any positive CPI reading ahead of tomorrow and the potential to move higher.

The other big mover which will come as a surprise for many has been oil markets as they took a dive today even though the drawdown from US stockpiles was -12.63 Million barrels (3.29M exp).  This sharp dive can be attributed to the strong USD, but also a build up in distilled products as well, showing that it's not all one sided as analysts thought. But also weighing into this has been commodities come under some serious pressure today, and it will be interesting to see if it carries over into tomorrow as well.

On the charts Oil has so far fallen sharply and hit the 20 day moving average with support from 69.38 before making a stop. If the bears are keen for another swipe tomorrow I would expect a push down to the next level at 67.45 and with the potential to even test the long term bullish trend line. If this was to break it would be quite the bearish signal. If the bulls do come back into the market then a push to resistance at 71.28 and 72.50 is on the cards as well.


Source   Presented by FXTM
Yen underwhelmed as BOJ jumps on unlimited bandwagon27 Apr, 2020  

The Japanese Yen initially breached the 107.3 level against the US Dollar, only to pare gains, after the Bank of Japan pledged unlimited buying of government bonds...

Buyers might be gaining the upper hand30 Mar, 2020  

The USDJPY currency pair, on the D1 time-frame, made a brief descending interchange until March 9 when a lower bottom was recorded at 101.178...

Japanese yen flies into the abyss19 Feb, 2020  

Macro data published this week of the Japanese economy finally hit the Japanese yen: at the beginning of the week it was a report on GDP, today in terms...


Yen Gains as Shinzo Abe Launches $121 Billion Stimulus6 Dec, 2019  

The Japanese yen strengthened slightly against the EUR as the markets reflected on the new stimulus package by Shinzo Abe. The $121 billion stimulus...

Currency Point: USDJPY multi-time framed29 Nov, 2019  

There are further signs in currencies that risk trading is facing fatigue and there is growing signs a short period...

USD/JPY eases from 2-month tops16 Oct, 2019  

Fading safe-haven demand continued weighing on the JPY and provided a goodish lift on Tuesday. The ongoing slide in the US bond yields...


Yen flexes bullish muscles3 Oct, 2019  

Everyone wanted a piece of the Japanese Yen on Wednesday after disappointing ADP payroll data from the United States and gloomy outlook on trade...

Yen shunned as risk appetite improves11 Sep, 2019  

The Japanese Yen is entangled in losing battle against every single G10 currency today as risk appetite improves on trade optimism and...

USD/JPY recovers to 107 area25 Jun, 2019  

10-year US T-bond yield extends slide, drops below 2%. US Dollar Index stays calm near the 96 mark. Fed's Williams & Bostic, FOMC Chairman Powell...