THE USD/JPY IS GROWING DESPITE THE STRONG GDP NEWS FROM JAPAN
The EUR/USD price is dropping after a strong upward impulse at the end of last week following the weaker than expected report on American consumer price index. The increase of inflation in July by only 0.1% reduced the possibility of the third rate hike by the Fed during 2017. The main factor that supports the greenback is some easing in tensions related to the confrontation between the US and North Korea. Investors are waiting for tomorrows data on American retail sales that may possibly lead to high volatility.
The USD/JPY demonstrates confident upward movements amid a stronger US dollar and a lower demand for the Yen as a defensive asset. We should note that those two factors have been able to offset the strong statistics according to which the Japanese economy expanded by 1.0% in the second quarter compared to 0.3% in the previous period.
The Australian dollar has been hit by a number of factors during today’s trading session, including the rebound of the US dollar, lower commodities’ prices and disappointing macro statistics from the country’s main trading partner China. Thus, the industrial production in the second largest economic power in the world slowed to 6.4% in June, that is 0.7% worse than expected. At the same time, retail sales in China during June increased by 10.4% vs the similar period of 2016 while experts anticipated an increase of 10.9%.
The single currency price has rolled back after it tested the local resistance near 1.1850. The potential of growth is limited by the important 1.1900 mark and its breaking will open the way for a further increase up to 1.2000 and 1.2200. On the other hand, fixing below 1.1800 may become a trigger for a continued fall to 1.1700 and 1.1620. The volatility is likely to remain high tomorrow.
After a number of attempts to overcome the 108.85 level and to fix below it, the USD/JPY has shown a confident growth within the descending channel and currently is around 109.60. In order to change the trend to positive, the price needs to break through the upper boundary of the channel and to gain a foothold above 110.30. In case of success, the targets will be at 113.00 and 114.70. Currently the price is moving within the descending band and its next goal in case of the fall resumption will be at 108.85.
The AUD/USD is falling sharply within the limits of the descending channel. In case of updating the local low near 0.7840 we are likely to see the drop to 0.7800. After a rapid movement, we may see the upward correction pointing to the RSI near the oversold zone on the 15-minute chart. In such cases, the quotes may return to 0.7900 and its breaking may trigger a further increase to 0.8000-0.8050.