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What’s next? – USDJPY 08.08.17

Aug 8 2017, 03:33 PM (+06) |

The dollar/yen was down 0.14 percent as of 07:50 GMT on Tuesday to trade at 110.57, as the American currency eased following dovish remarks from Federal Reserve officials.

Earlier in the session, Japan reported a current account surplus of 9.76 trillion, adding 2.2 percent on monthly basis. The surplus shows how much Japan earns from foreign investments.

The report also showed that in the last six month, the surplus moved to 10.51 trillion yen, up 0.3 percent from a prior year. These figures are seen as very promising for the Nippon economy.

Ahead in the day, traders will be paying attention to the JOLTs jobs openings for June, with a 5.775 million seen. Last month, the Labor Department said job applications were at 5.666 m.

However, attention is mainly to Thursday’s producer price index and Friday’s consumer price index, which could either support the dollar and expectations for a third rate hike or send the greenback back to a fifteen-month low at 92.41.

The greenback notched down yesterday on the back of a dovish comments from FOMC speakers. St. Louis Fed President James Bullard said current level of short-term interest rates is fine, suggesting no further rate adjustment are to be expected in the months to come.

From a technical perspective, traders could think of this time as a bullish opportunity. Almost every time this pair moves to the downside, it comes back stronger. For four months traders have been trying to change the downtrend and it seems it’s finally possible to get it done.

But again, it will all depend on inflation reports due this week and of course, further steps from the US central bank in terms of the monetary policy normalization process.

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