Yen unchanged as Japan inflation falls to two-year low

The Japanese yen was relatively unchanged after the Statistics Bureau of Japan released consumer prices data for August. They showed that the core inflation was at 0.5%, down from 0.6% in July. This was in line with the consensus forecast and was the lowest level since July 2017. Core CPI, which removes food and energy prices was stable at 0.6%. This data came a day after the Bank of Japan released its interest rates decision. In the meeting, the bank left interest rates unchanged and for the first time warned that it could slash rates again. 

The price of crude oil was relatively unchanged as traders continued to focus on the happenings in the Middle East. Yesterday, Secretary of State, Mike Pompeo was in Saudi Arabia where he held talks with the government on the weekend attacks. The US and Saudi Arabia have said that Iran was responsible. France also blamed Iran. In addition, according to the Wall Street Journal, Saudi Arabia has started importing oil from other countries, with the aim of filling the lost supply. Meanwhile, on Wednesday, data from the EIA showed that inventories rose by more than a million barrels over the past week.

Later today, traders will receive the PPI data from Germany. Traders expect the PPI to increase by 0.6%, which is lower than the previous 1.1% increase. On a MoM basis, the PPI is expected to drop from 1.1% to -0.2%. Canada will release retail sales numbers for July. The headline retail sales are expected to have increased by 0.4% while the core retail sales are expected to have declined from 0.9% to 0.2%. 


The EUR/USD pair moved up slightly in the Asian session. The pair is now trading at 1.1053, which is slightly higher than the intraday low of 1.1037. On the hourly chart, the pair has formed a symmetrical trading pattern. As a result of the consolidation, the pair is trading slightly above the 28-day and 14-day moving averages. There is a possibility that the price will remain at these levels today. 


The GBP/USD pair was little changed in the Asian session and is currently trading at 1.2530. On the hourly chart, this price is above the 14-day and 28-day moving averages. The pair is also trading within a channel as shown below. The RSI has remained slightly below the overbought level of 70. The money flow index rose to a high of 64.95. There is a possibility that the upward trend will continue as the pair tries to test the resistance of 1.2577.


XBR/USD was relatively unchanged in the Asian session as traders continued to watch out for more information on the Saudi attacks. The pair is trading at 63.92, which is much lower than the weekly high of 68.65. On the four-hour chart, this price is along the 14-day and 28-day moving averages. The pair is also yet to fill the gap that was created on Monday. The price is also along the 61.8% Fibonacci Retracement level. Today, with no major data expected, the pair could remain in this holding pattern. However, the issue at the Middle East is still fluid, meaning that anything can happen.

Add a comment