US economic data this week showed the world’s largest economy is in worse shape than most economists have predicted. Manufacturing and services sector data both clocked in worse than anticipated, ADP data showed a slump in private-sector hiring. The USDJPY started to reverse direction but remains well supported at current levels. How will price action react to today’s economic data out of the US? Today’s fundamental analysis will take a look at price action in both directions.
The Japanese Yen started to attract more demand as safe-haven seekers are rotating back into this currency. Despite much worse than expected global economic data, most forex traders are only focused on developments concerning the US-China trade talks. Clarity is absent and a skinny version of the phase-one trade deal may now be postponed until 2020. Will bulls attempt to keep the rally in the USDJPY alive or are bear waiting around the corner? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
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 November 30th are predicted at 215K and US Continuing Claims for the week of November 23rd are predicted at 1,660K. Forex traders can compare this to US Initial Jobless Claims for the week of November 23rd which were reported at 213K and to US Continuing Claims for the week of November 16th which were reported at 1,640K.
- US Trade Balance: The US Trade Balance for October is predicted at -$48.9B. Forex traders can compare this to the US Trade Balance for September which was reported at -$52.5B.
- US Factory Orders: US Factory Orders for October are predicted to increase by 0.3% monthly. Forex traders can compare this to US Factory Orders for September which decreased by 0.6% monthly.
Here is the key factor to keep in mind today for Japanese Yen trades:
- 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 November 29th was reported at -¥511.1B and Japanese Buying Foreign Stocks was reported at ¥210.0B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending November 22nd which was reported at -¥150.8B and to Japanese Buying Foreign Stocks which was reported at -¥63.8B. Foreign Buying Japanese Bonds for the period ending November 29th was reported at ¥606.8B and Foreigners Buying Japanese Stocks was reported at ¥394.0B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending November 22nd which was reported at ¥458.2B and to Foreigners Buying Japanese Stocks which was reported at ¥131.1B.
Should price action for the USDJPY remain inside the or breakdown below the 108.400 to 109.200 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 108.750
- Take Profit Zone: 106.500 – 107.000
- Stop Loss Level: 109.450
Should price action for the USDJPY breakout above 109.200 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 109.450
- Take Profit Zone: 110.650 – 111.000
- Stop Loss Level: 109.200
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