Source: PaxForex Premium Analytics Portal, Fundamental Insight

Foreign Buying of Japanese Bonds for the period ending August 7th was reported at -¥1,103.6B, and Foreigners Buying of Japanese Stocks was reported at ¥104.9B. Forex traders can compare this to Foreign Buying of Japanese Bonds for the period ending July 31st, reported at ¥225.6B, and Foreigners Buying of Japanese Stocks, reported at ¥3.2B.

The US Import Price Index for July is predicted to increase 0.6% monthly, and the US Export Price Index is predicted to increase 0.8% monthly. Forex traders can compare this to the US Import Price Index for June, which increased 1.0% monthly, and the US Export Price Index, which increased 1.2% monthly. Preliminary US Michigan Consumer Sentiment for August is predicted at 85.0. Forex traders can compare this to US Michigan Consumer Confidence for July, reported at 79.0.

The forecast for the USD/JPY remains bearish, with inflationary pressures elevated and likely to increase amid supply chain disruptions related to the Delta variant of the Covid-19 pandemic. While the Tenkan-sen and the Kijun-sen entered a sideways trend, the Ichimoku Kinko Hyo Cloud shows signs of rising bearish pressures. After the CCI briefly ventured into extreme overbought territory, it reversed and carries plenty of downside potential. Will bears awaken and force the USD/JPY into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.

Should price action for the USDJPY remain inside the or breakdown below the 110.200 to 110.600 zone, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Short Position
• Entry Level: Short Position @ 110.400
• Take Profit Zone: 108.550 – 109.000
• Stop Loss Level: 111.000

Should price action for the USDJPY breakout above 110.600, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Long Position
• Entry Level: Long Position @ 111.000
• Take Profit Zone: 111.650 – 112.000
• Stop Loss Level: 110.600

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