Dollar remains pressured after making new low against Euro, Yen and Aussie today. Economic data released from US provide little support to the greenback. Dollar index continue to hover around today's low of 76.20. Stocks open high on further rebound in commodities which saw the CRB index pressing 259 level. Gold remains firm after climbing to as high as 1023.3 earlier today. The Japanese yen also strengthened broadly after Hiroshia Fuji, the next finance chief in Japan, said today that he didn't support a weaker yen.
Headline CPI in US rose 0.4% mom in August. The yoy rate also climbed more than expected from -2.1% to -1.5%. Core PPI was at 0.1% mom, 1.4% yoy, inline with expectation. Industrial production rose more than expected by 0.8% in August. TIC capital flow showed much lower than expected inflow of 15.3b in July.
Data from UK saw unemployment rate risen to 7.9% in July, highest since 1995 but was better than expectation of 8.0%. Claimant count rose 24.4k, not far from expectation. Eurozone CPI rose 0.3% mom, dropped -0.2% yoy in August with core CPI unchanged at 1.3% yoy. Swiss retail sales rose 1.0% yoy in July. ZEW rose sharply to 58 in September.
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 90.67; (P) 91.15; (R1) 91.53; More..
USD/JPY fell to as low as 90.12 today before recovering mildly. The break of 90.20 suggests that recent decline from 97.77 has resumed and should now target lower channel support at 89.74 next. On the upside, above 91.62 will indicate that consolidation from 90.20 is still in progress. But after all recovery should be limited by 91.94/93.29 resistance zone. However, note that decisive break of 93.29 resistance will argue that whole fall from 97.77 has completed and will turn focus back to upper channel resistance (now at 96.58).
In the bigger picture, on the one hand, USD/JPY is still trading well below 55 weeks EMA and the long term falling trend line resistance The lower highs, lower lows pattern since 2007 high of 124.13 is still intact. Weekly MACD is also staying negative. On the other hand, the choppy look of the fall from 101.43 so far argues that it's corrective in nature and thus suggests that rise from 87.12 is still in progress. The conflicting indications keep medium term outlook mixed and question remains on whether USD/JPY has bottomed out at 87.12 already.
Focus is now on the lower channel support of the falling channel from 101.43. Sustained break there will indicate that the fall from 101.43 is accelerating which in turn argues that such fall is developing into an impulse. In other words, fall from 101.43 is part of the whole down trend from 124.12 and should extend beyond 87.12 low. On the other hand, while strong rebound from the channel support isn't a adequate signal of reversal, it will add more favor to the case that fall from 101.43 is merely a correction. Break of 97.77 resistance will further affirm the case that USD/JPY has bottomed out at 87.12 already.