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The U.S-China trade war saga continues. President Trump announced a delay on new U.S. tariffs against China, which were set to take effect on September 1. Still, tensions between the world’s two largest economies remains high, and the mass demonstrations in Hong Kong and the Chinese regime could lead to a further deterioration in U.S-China relations and could shake up the financial markets.
In the U.S., there was positive news from consumer inflation and spending numbers. CPI climbed 0.3% in July, matching the forecast. Core CPI remained steady at 0.3%, beating the forecast of 0.2%. Retail sales rose 0.7%, easily beating the estimate of 0.4%. Core retail sales sparkled with a gain of 1.0%, its best showing since March. On the manufacturing front, the Philly Fed Manufacturing Index slowed to 16.8, but still beat the estimate of 10.1.
Updates:
We start with 109.73, which has held in resistance since the end of May. 109.35 is close by.
108.70 follows.
108.10 was a swing low in late May.
107.30 has held in resistance since the first week in August.
106.61 remains relevant. It starts the new trading week as a weak resistance line.
105.55 (mentioned last week) is the first line of support.
104.65 is next.
The round number of 104 was a key line in May 2008.
102.50 is the final support line for now.
I am bearish on USD/JPY
The escalating feud between the U.S. and China is weighing on the Japanese economy, but investor risk appetite is low, which could boost the safe-haven yen. With stock markets showing sharp volatility due to fears of a recession in the U.S., there is upside for the Japanese currency.
Further reading:
Safe trading!
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