Trade data out of Japan reminded forex traders that the global economy is in worse shape than what economists have expected or what markets have priced in. Japanese All Industry Activity Index increased sharply, but supermarket sales plunged. The USDJPY started to move lower and is now trading below a strong horizontal resistance area. Where will price action move from here? Today’s fundamental analysis will take a look at price action in both directions.
After yesterday’s FOMC minutes, which echoed Fed Chief Powell’s comments in regards to future monetary policy, forex traders will get initial jobless claims as well as existing home sales. The Philadelphia Fed Business Outlook will also be released, but what impact will today’s economic reports have on the USDJPY as traders a growing concerned about the trade negotiations between the US and China? 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 16th are predicted at 219K and US Continuing Claims for the week of November 9th are predicted at 1,683K. Forex traders can compare this to US Initial Jobless Claims for the week of November 9th which were reported at 225K and to US Continuing Claims for the week of November 2nd which were reported at 1,683K.
- US Philadelphia Fed Business Outlook: The Philadelphia Fed Business Outlook for November is predicted at 6.1. Forex traders can compare this to the Philadelphia Fed Business Outlook for October which was reported at 5.6.
- US Existing Home Sales: US Existing Home Sales for October are predicted to increase by 2.1% monthly to 5.49M. Forex traders can compare this to US Existing Home Sales for September which decreased by 2.2% monthly to 5.38M.
- US Leading Index: The US Leading Index for October is predicted to decrease by 0.1% monthly. Forex traders can compare this to the US Leading Index for September which decreased by 0.1% monthly.
Here are the key factors 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 15th was reported at ¥119.4B and Japanese Buying Foreign Stocks was reported at -¥65.8B. Forex traders can compare this to Japanese Buying Foreign Bonds for the period ending November 8th which was reported at ¥530.0B and to Japanese Buying Foreign Stocks which was reported at ¥241.0B. Foreign Buying Japanese Bonds for the period ending November 15th was reported at -¥432.9B and Foreigners Buying Japanese Stocks was reported at ¥110.3B. Forex traders can compare this to Foreign Buying Japanese Bonds for the period ending November 8th which was reported at -¥87.2B and to Foreigners Buying Japanese Stocks which was reported at ¥569.8B.
- Japanese All Industry Activity Index: The Japanese All Industry Activity Index for September increased by 1.5% monthly. Economists predicted an increase of 1.5% monthly. Forex traders can compare this to the Japanese All Industry Activity Index for August which was reported flat at 0.0% monthly.
- Japanese Supermarket Sales: Japanese Supermarket Sales for October decreased by 4.1% annualized. Forex traders can compare this to Japanese Supermarket Sales for September which increased by 2.8% annualized.
Should price action for the USDJPY remain inside the or breakdown below the 108.250 to 108.850 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 108.550
- Take Profit Zone: 106.500 – 107.000
- Stop Loss Level: 108.750
Should price action for the USDJPY breakout above 108.850 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 109.100
- Take Profit Zone: 109.900 – 110.350
- Stop Loss Level: 108.850
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