Looking to go long on USD/JPY

ECONOMIC CALENDAR

EUR/USD: Schaeuble: Draghi has been “overinterpreted”

• Germany's Finance Minister Wolfgang told the Passauer Neue Presse in an interview that ECB governor Mario Draghi had been "overinterpreted" after he said he would use "all the available instruments" should inflation weaken more.

• The EUR/USD appreciated slightly in reaction to comments from Schaeuble, after falling as low as 1.3151 in Asian trade. We keep our bearish outlook for the EUR/USD. However, we see potential for some corrective moves and suggest caution in taking short positions.

Significant technical analysis' levels:

Resistance: 1.3221 (high Aug 25), 1.3297 (high Aug 22), 1.3324 (high Aug 20)

Support: 1.3105 (low Sep 6), 1.3089 (low Jul 19), 1.3051 (low Jul 16)

AUD/USD: AUD continues to perform well

• The value of construction work done in Australia fell in the second quarter by 1.2% qoq (seasonally adjusted) vs. median forecast of decline by 0.3% qoq. The AUD/USD fell below 0.9300 after the release but then recovered to test overnight high of 0.9331.

• Construction data along with key CAPEX number released in the evening EDT will provide a guide for next-week Q2 GDP reading.

• The AUD continues to perform well against its major crosses - EUR/AUD and AUD/JPY. At GrowthAces.com we keep our long position on the AUD/USD with the target of 0.9470.

Significant technical analysis' levels:

Resistance: 0.9345 (high Aug 19), 0.9358 (high Aug 7), 0.9360 (50-dma)

Support: 0.9272 (low Aug 26), 0.9235 (low Aug 21), 0.9229 (low Jun 3)

USD/JPY: Waiting for better levels to go long

• Vice Economy Minister Yasutoshi Nishimura is the opinion that Japan's government needs to be more cautious about a coming decision on raising the national sales tax than it was on the previous hike as the economy reaches a "make-or-break point”. Prime Minister Shinzo Abe is to decide around the end of the year whether to proceed with a plan to raise the tax to 10% next year after raising it to 8% from 5%. Nishimura said he hopes that the Bank of Japan would decide on further monetary easing. In his opinion it is too early to debate exit from monetary stimulus given that deflation has not been conquered yet. Koichi Hamada, the outside adviser to Prime Minister Shinzo Abe, is the opinion that Japan could soften the impact of a planned sales tax increase by raising it in stages rather than in a single hike.

• Japan’s government in its monthly report stuck to its overall view of the economy, which it had raised in July. Still, the government flagged the risk of a prolonged impact of the tax hike, as well as weaker overseas economies.

• Investors are waiting for macroeconomic releases scheduled for Friday (Thursday evening EDT) – CPI, unemployment rate, industrial output and retail sales. The data could strengthen expectations of further BoJ’s easing before the end of the year.

• The trading idea of GrowthAces.com is to go long at 103.80. The strong support is at the level of 103.75 (Tuesday low).

Significant technical analysis' levels:

Resistance: 104.17 (high Aug 17), 104.49 (high Aug 25), 104.84 (high Jan 23)

Support: 103.75 (low Aug 27), 103.50 (low Aug 22), 103.35 (38.2% of 101.51-104.49)

GROWTHACES.COM TRADING POSITIONS:

AUD/USD: long at 0.9305, target 0.9470, stop-loss 0.9230