The U.S. Dollar was on the right track versus the Japanese Yen in the last few months, reaching a fresh 3-month high; however, it hit a bit of a hiccup that could be concerning to some people betting on it. It fell below 114.00 yesterday and ended up bottoming out at 113.69, which is a new daily low for the currency. Currently, it sits just below 114.00, but there is plenty of reason to keep an eye on its movement moving forward.
New U.S. Data
New data released from the United States included better-than-expected quarter three readings for the GDP. However, the consumer confidence index came in below estimates, and the consumer expectations index missed expectations as well. Therefore, the positive GDP readings helped the currency, but don’t plan on it lasting too long. U.S. bond yields were steady after the data was released, which offered support to the Japanese Yen, pushing the USD/JPY downward. Forex traders are worried though, because President Donald Trump has mentioned that he is leaning toward Jerome Powell to lead the Federal Reserve. Many find this to be an interesting choice, considering Powell’s dovish demeanor. It remains to be seen whether or not Powell, if nominated, has what it takes to improve a deflating market.
What To Watch
The pairing of U.S. Dollars vs. Japanese Yen was unable to break their goal zone, which limited the potential upside in both April and July. A consolidation at the top would help increase gains in the midterm, making it an important barrier to overcome in order to strengthen the currencies’ relationship. As the U.S. Dollar continues to consolidate at monthly highs, there have been no clear signs of correction for the pairing; therefore, the next few hours will include immediate support for the Japanese Yen, if it were to reach 113.65. If it were to drop even lower, to around 113.00, plenty of attention will be drawn toward the struggling Asian market.