While Americans are getting divided on politics and the upcoming elections, the Ms. USA seems to be on the path to the north. From USD JPY testing Ichimoku, to USD/CAD breaking above it, it seems the US is doing at least something right. I’ll get into it in details here and in more detail during our private time 🙂
During Sunday night’s Asian session Japan released their trade balance setting the tone for the Japanese yen at the start of the week. The result came in better than expected at 0.33T.
This is the seasonally adjusted data. A positive number indicates that more goods were exported than imported, which is a sign of economic wellness for Japan.
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During the London session today Germany’s IFO – Business Climate is scheduled at 8 AM GMT followed by the UK’s 30-y Bond Auction.
During the New York session Dallas Fed Manufacturing Business Index is scheduled to be out at 2:30 PM GMT.
Later during the following day’s Sydney session it is New Zealand’s turn to release their Trade Balance at 10:45 PM GMT.
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Looking at the fundamental point of the Invest Diva’s Diamond Analysis, we certainly need to look at the US economy before getting into USD JPY testing Ichimoku technical analysis.
GDP: The final estimate for Q1 GDP growth turned out to be less of a disappointment, but the fact still stands that GDP growth has been slowing down. However, the available data for the Q2 months point to a bounce in Q2.
Employment: The rebound in employment last month was awesome, but the quality of the job gains… not so much.While the Fed doesn’t really seem to look at the quality of the jobs, Obama haters certainly do, and use this figure to defend their “Obama is the worst President of all time” argument.
However the bottom line is that the Fed will probably focus on the employment rebound and higher participation rate instead.
Production: Industrial production during the Q2 months was pretty good, at least when compared to the Q1 months. The PMI readings are pretty solid, with Markit’s July manufacturing PMI hinting that Q3 is off to a good start, not to mention the increase in new orders in June.
Spending: Available total personal spending data for the Q2 months showed respectable increases, which is better than the near-stagnation during the Q1 months. The only cloud on the data was the dip in personal income from all sources, but that didn’t seem to affect retail sales in June. Also, retail sales grew during all the Q2 months, so consumer spending seems to be doing okay.
USD JPY testing Ichimoku – Technical Analysis
After Japan’s intervention and continued growth in US economic data, the USD/JPY pair is heading back up to the good-old Ichimoku cloud to see if it can break above it this time around. The pair last tested and even entered the Ichimoku cloud back in May, however it was not able to breakthrough.
Since the pair is also at the pivot level of 106 at the moment, we are not getting our hopes up… However it is important to be on a watch-out to develop our next bullish strategy.
Long term trading strategy
Wait for a confirmation. Our resistance is set at 109.30 while support remains at 100.50
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