PPI data out of the US is expected to show the absence of inflationary pressures on the producer level while initial jobless claims are anticipated to remain near record lows. The focus has shifted from the Fed to the phase one trade deal between the US and China which appears incomplete. Some analysts expect it to be signed in December, but details remain scarce and conflicting. How will the USDJPY be impacted following the release of today’s data? Today’s fundamental analysis will take a look at price action in both directions.
Third-quarter GDP out of Japan came in weaker than expected on the back of a disappointment in private consumption while business spending advanced and inflationary pressures inched up. A boost in the key Tertiary Index rallied the Japanese Yen which is also attracting safe-haven bids. What impact will US economic data have on the USDJPY? 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 9th are predicted at 215K and US Continuing Claims for the week of November 2nd are predicted at 1,685K. Forex traders can compare this to US Initial Jobless Claims for the week of November 2nd which were reported at 211K and to US Continuing Claims for the week of October 26th which were reported at 1,689K.
- US PPI: The US PPI for October is predicted to increase by 0.3% monthly and by 0.9% annualized. Forex traders can compare this to the US PPI for September which decreased by 0.3% monthly and which increased 1.4% annualized. The US Core PPI for October is predicted to increase by 0.2% monthly and by 1.5% annualized. Forex traders can compare this to the US Core PPI for September which decreased by 0.3% monthly and which increased by 2.0% annualized. The US Core PPI ex Trade for October is predicted to increase by 0.2% monthly and by 1.5% annualized. Forex traders can compare this to the US Core PPI ex Trade for September which was reported flat at 0.0% monthly and which increased by 1.7% annualized.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese GDP: The Preliminary Japanese GDP for the third-quarter increased by 0.1% quarterly and by 0.2% annualized. Economists predicted an increase of 0.2% quarterly and of 0.9% annualized. Forex traders can compare this to the Japanese GDP for the second-quarter which increased by 0.4% quarterly and by 1.8% annualized. The Preliminary Nominal GDP for the third-quarter increased by 0.3% quarterly. Economists predicted an increase of 0.3% quarterly. Forex traders can compare this to the Nominal GDP for the second-quarter which increased by 0.4% quarterly. The Preliminary GDP Deflator for the third-quarter increased by 0.6% annualized. Economists predicted an increase of 0.5% annualized. Forex traders can compare this to the Preliminary GDP Deflator for the second-quarter which increased by 0.4% annualized. Preliminary Private Consumption for the third-quarter increased by 0.4% quarterly and Preliminary Business Spending increased by 0.9% quarterly. Economists predicted an increase of 0.6% and of 0.9%. Forex traders can compare this to Private Consumption for the second-quarter which increased by 0.6% quarterly and to Business Spending for the second-quarter which increased by 0.7% quarterly.
- 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 8th was reported at ¥528.8B and Japanese Buying Foreign Stocks was reported at ¥243.2B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending November 1st which was reported at ¥666.4B and to Japanese Buying Foreign Stocks which was reported at ¥381.7B. Foreign Buying Japanese Bonds for the period ending November 8th was reported at -¥77.6B and Foreigners Buying Japanese Stocks was reported at ¥569.5B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending November 1st which was reported at -¥539.8B and to Foreigners Buying Japanese Stocks which was reported at ¥422.2B.
- Japanese Tertiary Industry Index: The Japanese Tertiary Industry Index for September increased by 1.8% monthly. Economists predicted an increase of 1.1% monthly. Forex traders can compare this to the Japanese Tertiary Industry Index for August which increased by 0.3% monthly.
Should price action for the USDJPY remain inside the or breakdown below the 108.250 to 108.900 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 108.600
- Take Profit Zone: 106.500 – 107.000
- Stop Loss Level: 109.150
Should price action for the USDJPY breakout above 108.900 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 109.150
- Take Profit Zone: 110.650 – 111.100
- Stop Loss Level: 108.90
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