USDJPY under pressure ahead of key jobs data Thursday
Gary Christie October 22, 2020 4:11 AM
The pair remains in a bearish trend channel, key support is being tested: Chart
The US Dollar was bearish against all of its major pairs on Wednesday. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications slipped 0.6% for the week ending October 16th, compared to -0.7% in the prior week. Finally, the Federal Reserve's Beige Book stated that all districts have seen continued growth at a moderate pace since the downturn, however there is concern about the restaurant industry as cold weather approaches since they have relied on outdoor dining. Employment increased across all districts, although growth remained slow. Prices rose modestly across all districts, most notably consumer prices of food, automobiles and appliances increased significantly.
On Thursday, Initial Jobless Claims for the week ending October 17th are expected to decline to 870K, from 898K in the week before. Continuing Claims for the week ending October 10th are expected to fall to 9,625K, from 10,018K in the previous week. The Leading Index for September is anticipated to rise 0.6% on month, compared to +1.2% in August. Finally, Existing Homes Sales for September are expected to jump to 6.30 million on month, from 6.00 million in August.
The Euro was bearish against most of its major pairs with the exception of the CAD, CHF and USD. In Europe, the U.K. Office for National Statistics has reported September CPI at +0.4% (+0.5% on month expected). September PPI was released at -0.1% on month, vs +0.1% the previous month.
The Australian dollar was bullish against most of its major pairs with the exception of the NZD and GBP.
Looking at the major pairs, the USDJPY was under the most pressure in Wednesday's trading. The pair declined 94 pips to 104.56 as the USD continues to show weakness across the board. The decline is in the same direction as the longer term trend as the pair remains inside a declining trend channel. Key resistance can be seen at the 106.96 area where a break above would invalidate the bearish trend. Traders should watch closely the 104.20 support level as an attempt was made to break below on the 21st of September which was rejected.
Source: GAIN Capital, TradingView
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.