USD/JPY needs to stabilize above 106.00 to shrug off the bearish tone as the pair keeps trading below the 106.00 level, and today’s intraday advance fell short of changing the dominant bearish trend. On the data front, Japanese Retail Trade and Industrial Production missed expectations in July, FXStreet’s Chief Analyst Valeria Bednarik reports.
Key quotes
“Chinese upbeat data underpinned the market’s sentiment, as the official August PMIs came in better than anticipated. Manufacturing output expanded 51 in the month, while the services index resulted in 55.2. Japanese data, on the other hand, missed expectations, as Retail Trade contracted 2.8% YoY in July, while Industrial Production in the same month, was down by 16.1% YoY. Consumer Confidence in the country printed at 29.3 in August, down from 29.5 in the previous month.”
“The US session will bring the August Dallas Fed Manufacturing Business Index, previously at -3, while Fed’s Clarida will offer a speech.”
“The 4-hour chart shows that the USD/JPY pair is trading below all of its moving averages, with the 20 SMA heading lower below the larger ones, although all of them still confined to a tight range. Technical indicators, in the meantime, have recovered from oversold readings but turned flat below their midlines.”
“The USD/JPY pair could gain further bullish traction once it stabilizes above the 106.00 level.”
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