Dollar/yen finally found its footing and began recovering. The USD enjoyed a potent mix of good data, positive comments from Fed officials and upcoming tax cuts. The yen did not manage to ride on fears from yet another North Korean missile test. Will it continue higher?
Update: The Senate approved the bill by 51 to 49.
USD/JPY fundamental movers
It began with the highest new home sales in a decade, continued with a similar record from consumer confidence and then we got GDP at 3.3% annualized for Q3: an upgrade and also a great number on its own.
Outgoing Fed Chair Janet Yellen was relatively upbeat about the economy, while incoming Chair Powell said that a rate hike in December is “coming together”. He also sent a message of continuation in his confirmation hearings.
The US Congress is advancing step by step and in a determined manner to pass significant tax cuts. While the average American will not enjoy it, nor will growth really rise, this is helpful to the US dollar. While there are doubts about the “trigger”, there is a good chance that it will pass.
North Korea tested yet another missile, this time with a potential capacity to reach the East Coast of the US. This worrying development did not rattle the yen for a change.
Full buildup to the NFP and some data from Japan
The first full week of December includes the ADP NFP, the ISM Non-Manufacturing PMI and they all lead to the Non-Farm Payrolls. The University of Michigan’s consumer confidence and factory orders are also worth mentioning. For a change, we will get a significant number from Japan: a revision of GDP.
Updates:
USD/JPY Technical Analysis
115.35 is an old line that served as support when the pair traded on higher ground. 114.50 is the cycle high last seen in early July. The pair got close to that level.
113.50 was a temporary line of resistance on the way up in July. 113.70 was a separator of ranges in June.
