The Dollar loses ground for the 5th straight trading session
The dollar was on the defensive on Thursday still feeling the pinch of last Friday worse than expected non-farm payrolls report. The greenback has slipped against all the major currencies this week, except the Canadian dollar. The Pound remains strong and continues to tack on gains on the heels of Wednesday decision by the Bank of England to tie interest rate policy to unemployment.
The BOJ concluded its two-day meeting without changing policy or offering fresh initiatives of altering its assessment of the economy. Many market participants continue to expect the BOJ to take additional measures to ensure reaching the inflation target. The current target for the BOJ is to see core inflation above 2%. Given that the core is still showing deflation, the BOJ still has a long way to go. The tone of remarks by BOJ Governor Kuroda at the press conference did not seem to suggest further asset purchase were imminent.
The USDJPY moved lower for the 5th straight trading session, pushing toward supply near an upward sloping trend line that attaches the lows made in Mar to the Lows in June. The next level of target support is seen near the June lows at 94.00. Resistance is seen near the 10-day moving average at 97.84.
Momentum on the USDJPY is negative with the MACD printing in negative territory with a negative trajectory. The MACD generated a sell signal in July as the spread crossed below the 9-day moving average of the spread. The RSI (relative strength index) has broken through support levels and is printing near 36 which is on the low end of the neutral range just above the oversold trigger level of 30.
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