The USD/JPY pair is challenging the 61.8% retracement of its July/August rally at 105.25, poised to extend its decline. On the data front, mixed Japanese numbers passed unnoticed as the economic slowdown continues, FXStreet’s Chief Analyst Valeria Bednarik reports.
Key quotes
“Market players showed little enthusiasm to news indicating progress in the US fiscal stimulus package after House Speaker Nancy Pelosi hinted her party might be willing to make cuts to their proposal to seal a deal with Republicans. Meanwhile, Japanese data was mixed, as the July Merchandise Trade Balance Total posted a surplus of ¥11.6 B, better than the ¥ -77.6 B expected. However, Machinery Orders fell monthly basis by 7.6% and were down by 22.5% when compared to a year earlier, worse than expected. The US session will bring the FOMC Meeting Minutes.”
“The 4-hour chart shows that the 20 SMA accelerated its decline above the current level and that it is about to cross below a mildly bearish 100 SMA. Technical indicators, in the meantime, resumed their declines after a modest correction from oversold readings. July low at 104.18 is a possible target for the upcoming sessions, should the market keeps selling the greenback.”
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