The Japanese yen declined against the USD in the Asian session despite better-than-expected jobs numbers. The unemployment rate declined to 2.3% in September which was better than the consensus estimate and August’s unemployment rate of 2.4%. This figure was the lowest it has been since May which was the lowest level since 1992. Additionally, the jobs-to-applicants ratio of 1.64 was better than the 1.63 that traders were expecting. While the unemployment rate has been good in Japan, the country has struggled to generate inflation, which remains at 1%. This is below the BOJ’s target of 2%. The BOJ is expected to leave interest rates unchanged when it meets tomorrow.
Market risks continued yesterday in the United States. The markets opened on a positive note with the Dow gaining by more than 200 points. Within the day, things changed and the Dow ended the day lower by 245 points. This was slightly higher than the bear territory. The declines came after it emerged that the Trump administration was planning to place tariffs on remaining Chinese imports in December. These tariffs will go into effect if the conversation between Trump and Xi Jinping fail to reach a deal.
The euro was little changed against the USD after Angela Merkel announced that she will not stand for re-election in 2021. She also stepped down from her leadership role of the party. To many people, Merkel is the current leader of the free world after Trump’s preference for nationalism and his America First policies. Later today, traders will receive the German employment numbers, Spanish inflation numbers, and the EU GDP numbers.
EUR/USD
The EUR/USD pair is trading at 1.1380, which is unchanged from where it ended the day yesterday. The price is along the middle band of the Bollinger Bands while the double EMA shows no signs of a reversal. The momentum indicator is at the neutral 100 level. There is a likelihood that the pair will continue to drop until it tests the 1.1300 level.
USD/JPY
The USD/JPY pair continued the upward momentum started on October 26 and reached a high of 112.700. This is the highest it has been since Wednesday last week. The price is along the upper Bollinger Band while the RSI is currently at 68. The Money Flow Index, which is a volume-based RSI is at 44 and headed lower. While the upward momentum could continue, the pair is likely to see some downward movement that will see it test the 112.50 level.
GBP/USD
The GBP/USD pair was slightly lower in the Asian session. The focus among traders is on the BOE, which is expected to release its interest rate decision on Thursday. The pair is now trading at 1.2804. The double EMA show that the pair will likely continue the downward trend. This is confirmed by the Average Directional Index (ADX), which is currently at 33. If it does, it will possibly test the 1.2700 support level.
