Financial markets remain under a high degree of volatility with forex traders zoomed in on the People Bank of China and where it sets the Yuan rate, which for the first time was placed above the key 7.00 mark. While US president Trump is using Twitter to express his anger and claim victory is near, China reported a surprise increase in exports which saw its trade surplus swell further. The USDJPY came under more selling pressure, will bears force a breakdown below support or will bulls hold their ground? Follow the PaxForex Daily Fundamental Analysis and take the profitable side of this trade!
Here are the key factors to keep in mind today for US Dollar trades:
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of August 3rd are predicted at 215K and US Continuing Claims for the week of July 27th are predicted at 1,690K. Forex traders can compare this to US Initial Jobless Claims for the week of July 27th which were reported at 215K and to US Continuing Claims for the week of July 20th which were reported at 1,699K.
- US Inventories: US Preliminary Wholesale Inventories for June are predicted to increase by 0.2% monthly and US Preliminary Retail Inventories are predicted to increase by 0.2% monthly. Forex traders can compare this to US Wholesale Inventories for May which increased by 0.2% monthly and to US Retail Inventories which increased by 0.1% monthly.
Japan reported a bigger-than-expected trade surplus despite the US-China trade war as well as the one it wages with South Korea. Did Japan export more June as it saw rising issues and weaker demand moving forward? The Japanese Eco Watchers Survey for July decreased further with a depressed outlook. How will the Bank of Japan react to a strengthening Japanese Yen as forex traders flock to safe havens? Today’s fundamental analysis will take a look at price action in the USDJPY in both directions.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese Housing Loans: Japanese Housing Loans for the second-quarter increased by 2.2% annualized. Forex traders can compare this to Japanese Housing Loans for the first-quarter which increased by 2.4% annualized.
- Japanese Current Account Balance and Trade Balance: The Preliminary Japanese Current Account Balance for June was reported at ¥1,211.2B. Economists predicted a figure of ¥1,174.4B. Forex traders can compare this to the Japanese Current Account Balance for May which was reported at ¥1,594.8B. The Preliminary Japanese Adjusted Current Account Balance for June was reported at ¥1,941.9B. Economists predicted a figure of ¥1,756.5B. Forex traders can compare this to the Japanese Adjusted Current Account Balance for May which was reported at ¥1,305.7B. The Preliminary Japanese Trade Balance for June was reported at ¥759.3B. Economists predicted a figure of ¥708.0B. Forex traders can compare this to the Japanese Trade Balance for May which was reported at -¥650.9B.
- Japanese Buying Foreign Bonds and Japanese Buying Foreign Stocks/Foreign Buying Japanese Bonds and Foreigners Buying Japanese Stocks: Japanese Buying Foreign Bonds for the period ending August 2nd was reported at ¥286.2B and Japanese Buying Foreign Stocks was reported at ¥95.3B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending July 26th which was reported at -¥161.5B and to Japanese Buying Foreign Stocks which was reported at ¥104.1B. Foreign Buying Japanese Bonds for the period ending August 2nd was reported at ¥179.9B and Foreigners Buying Japanese Stocks was reported at -¥339.9B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending July 26th which was reported at ¥607.4B and to Foreigners Buying Japanese Stocks which was reported at ¥36.7B.
- Japanese Bank Lending: Japanese Bank Lending including Trusts for July increased by 2.3% annualized and Japanese Bank Lending excluding Trusts increased by 2.5% annualized. Forex traders can compare this to Japanese Bank Lending including Trusts for June which increased by 2.3% annualized and to Japanese Bank Lending excluding Trusts which increased by 2.4% annualized.
- Japanese Eco Watchers Survey: The Japanese Eco Watchers Survey Current Index for July was reported at 41.2 and the Japanese Eco Watchers Survey Outlook Index was reported at 43.5. Economists predicted a figure of 43.3 and of 45.2. Forex traders can compare this to the Japanese Eco Watchers Survey Current Index for June which was reported at 44.0 and to the Japanese Eco Watchers Survey Outlook Index which was reported at 45.8.
Should price action for the USDJPY remain inside the or breakdown below the 105.800 to 106.450 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 106.100
- Take Profit Zone: 103.750 – 104.600
- Stop Loss Level: 106.650
Should price action for the USDJPY breakout above 106.450 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 106.750
- Take Profit Zone: 108.400 – 109.000
- Stop Loss Level: 106.450
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