JPY strengthened, US GDP in focus
JPY was strong across the board today with USD/JPY pressing 115.30 level again, EUR/JPY falling further to 146.43 level. CPI increased for the eighth month in June, by 0.6%, add further evidence that deflation is over. Retail sales rose 0.1% mom, 0.4% yoy, also better than expected. Though, unemployment came at 4.2%, higher than consensus of 4.0%. However, the main driver behind the JPY strength is thought to be continuous speculation on Yuan appreciation after US senators expressed that the want to set a deadline (Sept 30) for Yuan appreciation or they will push ahead with legislation to impose a 27.5% duty on Chinese goods.
Focus of today will be on US 2Q GDP (advanced), which is expected to moderate from prior +5.6% to +3.0%, confirming slowing of growth. Price index is expected to increase from 3.1% to 3.8%. Personal consumption is expected to drop to 2.1% from 5.1% while core QoQ PCE is expected to rise to 2.9% from 2.0% prior. Market will continue trying to get more hints from data on whether Fed will pause in Aug.
USD/CHF
Daily Pivots: (S1) 1.2320; (P) 1.2368; (R1) 1.2430; More.
USD/CHF’s fall from 1.2545 has reached 1.2307 only. Subsequent recovery has pushed USD/CHF above 12385 minor resistance, turning intraday outlook consolidative. Intraday bias is turned mildly to the upside for 4 hours 55 EMA (now at 1.2421)
As USD/CHF remains supported above mentioned short term rising trend line (now at 1.2282), overall picture remains mixed. ON the downside, as discussed before, sustained trading below this trend line is needed to suggest that whole rebound from 1.1919 has completed already and bring further weakness to 1.2181 cluster support (61.8% retracement of 1.1919 to 1.2594 at 1.2177).
However, in a bigger picture, weekly MACD’s turn above signal line is suggesting that price action from 1.1919 could be developing into a larger consolidation to the whole fall from 1.3283. Hence firstly failure to break below mentioned trend line will indicate the rebound from 1.919 is still underway. Secondly, firm break below 1.2181 is needed to confirm weakness and bring further decline to 1.1919 low. Otherwise, USD/CHF is still bounded is sideway trading and risk of another rise remains before completing the consolidation.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.
Shing-Ip Tsui (Shing) is the founder and CEO of www.ActionForex.com. ActionForex is set up with the aim to empower individual forex traders by providing insightful contents. Analysis reports, live pivot points on majors and crosses, etc are provided with collection of carefully selected educational articles and free trading ebook downloads.