- Summary:
- Economy Watchers Sentiment Index from Japan prints at five-year low; inverse head and shoulders on the daily chart of USDJPY still intact.
Despite weekend gaps across most currency pairs, it’s been a slow and quiet start to this week’s trading.
AUDUSD opened 5 pips below Friday’s close at 0.6852, NZDUSD gapped two pips lower at 0.6325, while USDJPY opened at 109.17 from last week’s close at 109.23.
Concerns over the US-China trade deal seem to be responsible for the weekend gaps. Remember that earlier last week, Beijing reported that a rollback on tariffs imposed by the US on Chinese goods will soon be implemented. All of these changed on Friday when US President Donald Trump warned that he has not yet agreed on any deal.
There are no reports scheduled from Australia, New Zealand, and the US today. Early in Asian trading, the Economy Watchers Sentiment Index from Japan which measures optimism on consumer spending was released. It showed a 36.7 reading which translates to a five-year low, hinting that consumption in Japan is struggling amidst the government tax hikes. The report did not cause an immediate nor drastic response from the market but USDJPY did fall below the 109.00 level during the Asian session.
Inverse Head and Shoulders on USDJPY
On the daily chart of USDJPY, the inverse head and shoulders pattern still looks intact. The currency pair has been struggling to break resistance at the neckline around the 109.00 level but reports from the US could help propel it upwards. Data on inflation are scheduled on Wednesday at 1:30 pm GMT. The headline CPI figure is estimated at 0.3% while the core reading is at 0.2%.
The only high-impact report scheduled for today is UK’s Q3 GDP report. This means that it’s probably going to be a quiet day for most major currency pairs except for GBPUSD. Market sentiment in reaction to news surrounding the US-China trade deal will likely dictate the direction of most currency pairs today.