Home » Weekly Forecast » Dollar Trades below Key Simple Moving Averages

Dollar Trades below Key Simple Moving Averages

Dollar

After the core U.S. consumer price index (CPI) for the month of July fell less than expected, the U.S. dollar fell sharply lower against the Japanese yen. The benchmark USD/JPY currency exchange rate fell below the 21, fifty and one hundred day simple moving averages.

However, monthly U.S. factory gate prices, also known as the producer price index (PPI) continued climbing showing inflation in the pipelines.

Monday’s economic calendar is fairly quiet. The United States is publishing their monthly Empire State manufacturing index. Japan will publish their monthly trade balance and current account during the Asian trade session.

Overnight into Tuesday Japan will publish a minor economic watchers survey. Also, overnight in Tuesday, the Reserve Bank of Australia (RBA) will release their monthly monetary policy meeting minutes.

The United Kingdom has economic data scheduled for release. Germany’s central bank (BUBA) will publish their monthly report. The euro area has nothing on their economic docket on Monday.

Daily U.S. Dollar Technical Analysis (USD/JPY)

Looking at the above daily MT 4 price action chart, the 14 day MACD momentum indicator has faded. The momentum indicator is potential a weak buy signal for traders of the U.S. dollar. The 14 day relative strength index (RSI) looks neutral. The 20 pip selloff seen on Friday was also due to shockingly weak U.S. consumer sentiment survey data.

There was technical support, now an upside barrier lining up at the 50 day simple moving average at 110.18 yen. The next layer of technical resistance lines up at the 100 day simple moving average near 109.70. The 21 day simple moving average lines up at 109.70.

On the downside, immediate technical support lines up at 109.70 yen. The next layer of technical support comes into play at 109.50 yen. However, with the overall weakness of Japan’s economy, the Japanese yen looks weak against the greenback. This should limit losses in the USD/JPY Forex market for now.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

Check Also

gold

Gold Futures look to Stay Above $1,800 per Ounce

0.0 00 The spot gold futures contract is trading back above $1,800 per ounce after …