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Markets make a return on USD towards risky assets with the help of better information from emerging markets, while the disappointment of CPI from the US has covered the earlier optimism around the US economy. The stock market in Asia is in a reconstruction mode.
Even though President Trump denied yesterday that he would be interested in a quick return to talks with China, investors switched to buying risk strengthened by a huge interest rate hike in Turkey (+625 bp) and lower-than-expected CPI reading from the US.
At night, we see that NZD, AUD and CAD perform best, although the changes are small. EUR / USD stopped just under 1.17, and USD / JPY - under 112.
On Friday, the 14th of September, the last trading session of the week will not be rich in macroeconomic data. Before noon, traders will only know the trade balance and wage dynamics in the Eurozone. At noon, there will be the speech of the Bank of England Governor - Mark Carney.
USD/JPY analysis for 14/09/2018:
The Prime Minister of Japan said overnight, that inflation is one of the measures of the monetary policy applied by the Bank of Japan, but the creation of jobs is a key factor. Much is still missing to achieve the price target, but Abe's confidence in the central bank's operations is high. He does not think that the Bank of Japan should maintain a very loose monetary policy forever. However, Kuroda and the company depend on when they start tightening.
Let's now take a look at the USD/JPY technical picture at the H4 time frame. Since the time of Abe's speech, the Japanese yen strengthened slightly against the dollar, although on the other hand, it may simply be a downward reaction to the rise from yesterday's evening. USDJPY is currently around 111.80 after a new high was made at the level of 112.10. The area between the levels of 112.04 - 112.17 is a strong supply zone, so it might be hard for bulls to break out above it in a first attempt. Nevertheless, the momentum remains strong and positive, so after a local pull-back (due to overbought market conditions) towards one of the support levels, the bulls should try again to rally higher.
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