Forex snapshot

The US dollar pulls back after the Bank of Japan keep its policy unchanged. The Australian dollar has been treading water on the back of the retail sales and trade figures.

Yen and dollar currency
Source: Bloomberg

USD/JYP finds support at 200-H MA

The USD/JPY pair is trading at ¥104.89. Overnight the Bank of Japan maintained its monetary policy rather than expanding it as some traders had anticipated. The pull back in the US dollar hasn’t been too big given the high hope dealers had for an additional stimulus.

The suggestion that the Japanese economy needs extra monetary easing will not go away after the country posted a negative growth of 1.7% in the second-quarter. As Ryan Huang stated, the dollar recently hit an eight-month high versus the yen but traders are now focused on the US jobs report tomorrow. Analysts are expecting an increase of 230,000 jobs on the payroll.

The 200-hour moving average of ¥104.26 is providing support. A bullish jobs report could put the US dollar on a path to ¥106.00.

AUD/USD tries to hang on to recent gains

The Australian dollar is trading at $0.9345, broadly unchanged on the day revealing an increase in retail sales of 0.4% in July meeting estimates. While the nation registered its fourth consecutive trade deficit, it did decrease by 13%. As Chris Weston stated, the Australian dollar quickly smashed through the $0.93 barrier on the back of the GDP report, but can the Aussie dollar hang on to those gains as the US jobs report draws near.

Even if a strong US dollar continues, I don’t see the Australian dollar at $0.9260 in the near feature. That said, a strong figure from the US could see us heading towards that level tomorrow.

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