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Japanese household spending jumped 9.5% in September, as consumers rushed to make purchases before a new sales tax took effect in October. However, the real test for the economy will whether consumer spending remains in positive territory in the upcoming months.
In the U.S., there was good news from the services sector, which continued to show expansion in October. Services PMI improved to 54.7, above the estimate of 53.5 points. The UoM Consumer Sentiment index dipped to 95.7, shy of the forecast of 97.0 points. There was a significant development on the trade front, as a Chinese report stated that the U.S. and China had agreed to phase out tariffs. However, no timetable was given.
Updates:
We start with resistance at 112.25.
111.62 was last active in April. 110.62 is next.
109.73 has held in resistance since the end of May. 109.35 is close by.
108.70 is providing support. 108.10 is next.
107.30 (mentioned last week) switched to support in early October.
106.61 is next.
105.55 has held in support since late August. It is the final support level for now.
I remain bullish on USD/JPY
Weak global demand has taken a toll on the Japanese exports and manufacturing sectors. With expectations that the U.S. and China could reach a trade deal, risk appetite could jump and dampen sentiment for the Japanese yen.
Further reading:
Safe trading!
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