21 Oct MO USDJPY – 21.10.2019
Long Term Overview:
US economy performed well in 2019 but Q2 & Q3 remained mixed. Consumer segment remains strong and labour and housing market tight but, at the same time, uncertainty surrounding trade talks and a related global growth deceleration have translated into weaker domestic business investment and pressure on the manufacturing segment. Although, inflation pressures remain muted.
The stock market experienced highs during the last twelve months. That indicated the peak of the normal business cycle but it also reached low points which stirred fears of a recession. It will probably move sideways as investors wait to see how the trade war resolves. The market is risk-averse and cautious. US economy is expected to experience subdued economic growth although a recession is unlikely.
Longterm Market Position
Overall USD has been trading under the bullish influence since a previous month but there is a lot of turbulence due to geopolitical and economic factors. This currency pair had been touched the lowest point of 104.50 level a few times but bounced and recovered. Buyers could be extending moves to the upside but 110.00 level could provide a struggle as a significant resistance of 200 EMA crosses just around there.
Prices could remain hovering within 108.00 and 110.00 region in coming times. However, the unfolding of trade talk and economic prints would be deciding factors for a direct path.
Medium-term Market Position
USD is gradually ascending since the start of September but overall it remains range bound and hovering between 108.00 & 109.00 region. Occasional ups and downs can be seen on 2-week time frame but that is how this currency pair is behaving in recent times.
USD is restricted to the upside as trade talks are giving concerns but the market is risk-averse and prefers to wait to see how events are going to unfold. Currently, it is hovering right at the middle of 108.00 handle with strong support of 200 EMA underneath around 107.50.