- This despite solid Redbook Index and Jobs Openings data
- USD/JPY down to 111.25 at one stage after showing early losses
- Currency pair has since recovered to 111.28
Monday’s forex trading session was a difficult one for the USD, and it notched up across-the-board losses against major international currencies. This came as quite a surprise taking into account yesterday morning’s robust Redbook Index data.
On both a monthly and a yearly basis, the Redbook Index exceeded expectations. Since this index reflects the performance of around 9,000 major general merchandise outlets in the US, this was good news for the retail industry – but it failed to boost a lackluster dollar.
Apart from that, June’s US JOLTS Job Openings showed an increase from the earlier release at 6.662 million.
Although these are secondary reports, both supported the picture of a growing economy. The USD nevertheless struggled from the beginning to the end of yesterday’s trading session.
The USD/JPY showed early losses. At the time of writing, it was trading at around 111.25, a drop of 14 pips. Should it rally later, a key resistance level will have to be breached.
Since last month’s sell-off, the USD/JPY has been trading in a range between 110.50 and 112.00. This tight range is likely to remain in place until US CPI data is released on Friday. Watch out for the following two resistance levels until then:
- Bollinger MP, 111.52
- Daily SMA, 111.86
Some secondary economic reports are due from Japan overnight. One of them is the Foreign Reserves and Trade Balance data, but this is unlikely to cause major waves in the market.
Update 01.57 EST. The USD/JPY is currently trading at 111.28.