30.08.201613:13 Forex Analysis & Reviews: Global macro overview for 30/08/2016

Global macro overview for 30/08/2016:

A bunch of macroeconomic data from Japan released overnight was mostly disappointing for market participants, but some of them were quite interesting anyway. The Japanese Household Spending data were better than expected as market participants had expected a slower decline from -2.3% to -1.3%, but the figure published was at the level of -0.5% year-on-year in July (the fifth consecutive decline ). Moreover, the unemployment rate fell to the level of 3.0%, the lowest seen in over 21 years. The nation's job to applicants ratio held steady at 1.37, which means almost everyone who wants a job has one. In conclusion, the recent tightening of the monetary policy and extra stimulus introduced by the Bank of Japan earlier this month might have eventually become an effective tool to increase the inflation and trigger more spending among employed people. Nevertheless, to confirm this scenario we need to wait for another set of data next month.

Let's now take a look at the USD/JPY technical picture in the daily time frame. The market is still trading near the lows from the previous month, but no new low has been made yet. The bounce from the technical support at the level of 99.95 is clear and it looks like the market is heading towards the moving average at the level of 103.00. The next technical resistance is seen at the level of 103.99.