Forex traders will get US housing data as well as a regional manufacturing index which is expected to add volume to US Dollar trades. Regional reports have come in mixed and highlighted cracks in the US economy. The USDJPY advanced off of its lows, but remains stuck in a tight trading range as an interest rate cut by the US Fed looms as the economy is cooling. Can bulls attempt a breakout or will bears force a reversal? Today’s fundamental analysis will take a look at the upside and downside potential of this currency pair.

Here are the key factors to keep in mind today for US Dollar trades:

• US House Price Index: The US House Price Index for May is predicted to increase by 0.3% monthly. Forex traders can compare this to US House Price Index for April which increased by 0.4% monthly.
• US Richmond Fed Manufacturing Index: The US Richmond Fed Manufacturing Index for July is predicted at 5. Forex traders can compare this to the US Richmond Fed Manufacturing Index for June which was reported at 3.
• US Existing Home Sales: US Existing Home Sales for June are predicted to decrease by 0.1% monthly to 5.34M. Forex traders can compare this to US Existing Home Sales for May which increased by 2.5% monthly to 5.34M.

The Japanese Yen came under selling pressure as forex traders locked in floating trading profits after a strong rally. Given the elevated degree of geopolitical risks, this sell-off could be reversed quickly as demand for safe haven assets is expected to remain high. Later during today’s trading session, the next UK Prime Minister will be announced. Adding to bullish sentiment for the Japanese Yen was a research note which suggested that traders who seek a hedge for their portfolio will find a better suitor in the Japanese currency than gold. How will this impact the USDJPY? Subscribe to the PaxForex Daily Fundamental Analysis and earn more pips per trade!

Here is the key factor to keep in mind today for Japanese Yen trades:

• Bank of Japan Core CPI: The Bank of Japan Core CPI for June increased by 0.6% annualized. Economists predicted an increase of 0.6%. Forex Traders can compare this to the Bank of Japan Core CPI for May which increased by 0.7% annualized.

Should price action for the USDJPY remain inside the or breakdown below the 107.800 to 108.300 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 108.150
• Take Profit Zone: 104.600 – 105.250
• Stop Loss Level: 109.000

Should price action for the USDJPY breakout above 108.300 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 108.800
• Take Profit Zone: 109.900 – 110.650
• Stop Loss Level: 108.150

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