USDJPY, H4
The Dollar dipped following the Empire State index, which was weaker than expected. USDJPY fell 5 points under 113.20 from near 113.09, closing the 4-hour candle below 3 intraday key levels, the S1 from pivot analysis, the 200-period EMA but also the 20-day SMA which stands at the 113.22 level.
US Empire State index dropped 12.4 points in December to 10.9, below expectations, after rising 2.2 points to 23.3 in November and 2.1 points to 21.1 in October. It was 19.6 last December, and this is the lowest reading since May 2017. The 2018 high was 25.6.
However, the components were mixed. The employment gauge jumped to 26.1 from 14.1, though the workweek dipped to 8.0 from 9.2. New orders slid to 14.5 from 20.4. Prices paid fell to 39.7 from 44.5, with prices received at 12.8 from 13.1. The 6-month general business conditions index declined 3.0 points to 30.6 from 33.6. The future employment index improved further to 19.4 from 16.6, with new orders at 34.2 from 39.7, and prices paid at 51.9 from 59.1, with prices received at 27.6 from 31.4.
Meanwhile, President Trump added further pressure on Greenback as he lashed out at Fed again on Twitter.
“It is incredible that with a very strong Dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!”
US equity futures have continued to move lower, now indicating a fairly sharp downdraft at the Wall Street open, which has weighed on the risk-sensitive USDJPY. The pair’s next support comes at 112.95 and 112.70.
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Andria Pichidi
Market Analyst
HotForex
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