USDJPY under pressure ahead of key jobs data Thursday

The pair remains in a bearish trend channel, key support is being tested: Chart

FOREX 10

The US Dollar was bearish against all of its major pairs on Wednesday. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications slipped 0.6% for the week ending October 16th, compared to -0.7% in the prior week. Finally, the Federal Reserve's Beige Book stated that all districts have seen continued growth at a moderate pace since the downturn, however there is concern about the restaurant industry as cold weather approaches since they have relied on outdoor dining. Employment increased across all districts, although growth remained slow. Prices rose modestly across all districts, most notably consumer prices of food, automobiles and appliances increased significantly.         

On Thursday, Initial Jobless Claims for the week ending October 17th are expected to decline to 870K, from 898K in the week before. Continuing Claims for the week ending October 10th are expected to fall to 9,625K, from 10,018K in the previous week. The Leading Index for September is anticipated to rise 0.6% on month, compared to +1.2% in August. Finally, Existing Homes Sales for September are expected to jump to 6.30 million on month, from 6.00 million in August.   

The Euro was bearish against most of its major pairs with the exception of the CAD, CHF and USD. In Europe, the U.K. Office for National Statistics has reported September CPI at +0.4% (+0.5% on month expected). September PPI was released at -0.1% on month, vs +0.1% the previous month.

The Australian dollar was bullish against most of its major pairs with the exception of the NZD and GBP. 

Looking at the major pairs, the USDJPY was under the most pressure in Wednesday's trading. The pair declined 94 pips to 104.56 as the USD continues to show weakness across the board. The decline is in the same direction as the longer term trend as the pair remains inside a declining trend channel. Key resistance can be seen at the 106.96 area where a break above would invalidate the bearish trend. Traders should watch closely the 104.20 support level as an attempt was made to break below on the 21st of September which was rejected. 



Source: GAIN Capital, TradingView

Happy Trading.

More from Forex

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.