The USD/JPY is having a tough time setting its next short-term direction on Thursday and continues to trade within the 2-week old range. As of writing, the pair was trading at 112.32, losing 0.16% on the day.
Today's data from the U.S. showed that despite the negative impact of hurricanes Harvey and Irma, weekly initial jobless claims decreased by 15K to 243K for the week ending September 7. Furthermore, Producer Price Index for final demand grew by 0.4% on a monthly basis in September, lifting the annual PPI to its highest level in nearly 5 years at 2.6%. Boosted by the upbeat data, the US Dollar Index extended its upward correction to a fresh session high at 93.02. At the moment, the index was at 92.95, adding 0.17% on the day.
- US: Weekly initial claims was 243,000, a decrease of 15,000 from previous week
- US: Producer Price Index for final demand advanced 0.4% in September
In the meantime, major equity indexes in the U.S. started the day lower, helping the traditional safe-haven JPY show resilience against the buck. As of writing, the Dow Jones Industrial Average was losing 0.07% while the S&P 500 was down 0.14%.
Later in the session, FOMC members Brainard and Powell will be delivering speeches. Investors will be looking for hints regarding a December rate hike. After the FOMC released its September meeting minutes on Wednesday, the CME Group FedWatch Tool's rate hike probability dropped around and 10% and was last seen at 81.7%.
Technical indicators for the pair support the near-term neutral outlook. On the downside, supports align at 112.00 (Oct. 10 low/psychological level) ahead of 111.40 (200-DMA) and 110.80 (50-DMA). On the upside, resistances could be seen at 112.50 (20-DMA), 113.45 (Oct. 6 high) and 114.50 (Jul. 11 high).
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