USD-JPY has been drumming the bullish bias for the last few months and it was reached 111.76 (monthly-high) at a point, showing a chance of breaking above 112.20 region. However, the exchange rate is pulling back and it is now being traded at 111.25 while this report is being written. Surprisingly, recent US economic data showed that the rate might have been continuing to consolidate in this month and we might find USD/JPY below 110.5 in a couple of weeks.
- Recent US economy data shows pretty mixed outlook
- A FED interest rate decision is going to be on the air in September 26th, that might increase the rate to control the US inflation
Here is how USD has dealt today against currencies and commodities
USD-JPY eyeing monthly lows
U.S producer price index showed mixed result and the consumer price index was disappointing too. On the other hand, GBP is making significant improvement followed by Brexit development and a much-anticipated BoE rate decision to come tomorrow. Crude oil price is rising sharply and is trading over 70.10 while writing this report. Surprisingly, Gold is still holding its position well above 1200 zone. Considering the economic data, the overall outlook for USD does not appear to be decent in this month. That is why, we are anticipating a modest consolidation of USD/JPY exchange rate, turning the wheel back well below 110.5.
The consumer price index is anticipated to show an uplift to 2.9% from 2.8%, yet the market signs are not agreeing with the expectation and the CPI price has fallen below the expected rate. In addition, the PPI rate is also expected to receive the same fate, as CPI report has found out.
Daily Chart of USD-JPY
At the moment, you may well look forward to a monthly-low (110.38), as there is lack of momentum for USD to move the pair riding above 110.10 zone on a continuous basis. Falling below 110.5 will increase the risk of a move towards the 109.50 regions. On the upside, we do not actually find out any real engine to move this pair above 111.50. At the end of the month, the pair may seriously fall in trouble and reach below 109.50, unless the 26th September’s FED interest rate shows an unexpected U-turn.
Read more about GBP-USD here.
Disclaimer: The content of this article is personal opinion and should not be considered as investment advise or suggestion towards any trading activity.