Japanese yen gains after mixed machinery order data
The Japanese yen strengthened slightly against the USD after the country released machinery order data. In September, core machinery order data rose by 5.1%. This was higher than August’s slump of -14.5% but lower than the consensus estimates of 7.9%. The core machinery orders declined by -2.9% on a MoM basis. This was lower than the consensus estimates of 0.9% and August’s decline of -2.4%. The currency also reacted to the BOJ Summary of Opinions. These opinions showed that BOJ members debated whether extra measures should be taken in case momentum towards achieving the target is lost.
Sterling was relatively unchanged as the markets waited for key economic data from the country. Later today, the Office of National Statistics (ONS) will release the economic growth data for the third quarter. The market expects that the GDP grew by an annualised rate of 1.1%. This will be lower than the second quarter’s growth of 1.3%. The industrial production is expected to decline by -1.3%, which will be slightly better than August’s -1.8%. Manufacturing production is expected to have declined by an annualised rate of -1.6%. Meanwhile, the trade deficit is expected to have increased to 10 billion pounds.
The USD was relatively unchanged as traders started focusing on the new week. This week, the market will see actions as traders receive important information. Tomorrow, Donald Trump will be talking at the Economic Club of New York, where he will likely talk about trade. The market is waiting for a definitive policy position on the Chinese tariffs. This week, Jerome Powell will testify before Congress, where he will provide guidance on Fed’s policy actions. The market will also receive important GDP, CPI and retail sales data from several countries like Japan and the US.
The EUR/USD pair was relatively unchanged from Friday’s close. The pair is trading at 1.1020, which is the lowest level since October 14. On the hourly chart below, this price is slightly below the 50% Fibonacci Retracement level. This price is below the 14-day and 28-day moving averages. The RSI has moved to below the oversold level. The pair may continue moving lower today.
The USD/JPY pair declined after the market received the machinery orders from Japan. The pair reached a low of 109.10. On the hourly chart, the pair formed a double top pattern last week. The 14-day and 28-day EMAs have made a bearish crossover. The pair may continue to decline. If it does, it may reach the 50% Fibonacci level of 108.67 in the coming few days.
The GBP/USD pair rose slightly ahead of GDP data. The pair was also reacting to a Moody’s statement that lowered the UK economic outlook. The pair reached a high of 1.2795, which is close to last week’s low of 1.2765. The short and medium-term moving averages appear to be making a bullish crossover. The pair may move slightly higher to test the important support of 1.2800.