Technical Analysis 2017.09.01 – EUR/USD & USD/JPY

EUR/USD Current trend
After reaching its local max at 1.2065 EUR has been falling against the USD. It is currently at 1.1913.
USD is currently experiencing a buying trend – largely based on Trump’s promise for tax reform which is in House of the Representatives for review. Trump’s plan is to lower income tax for companies based in the US to facilitate job creation and global competitiveness, establishing a profitable environment for the expansion and development of these companies. This cut seeks to lower taxes to 15% from 35%. Analysts of course point out the obvious that a loss of income for the government would cause an inflation of Federal budget’s deficit.
The public debt ceiling has at least at a preliminary level has been agreed on.

Markets will likely stay away from the pair before the opening of the US trading session, as most traders are waiting for the release of Unemployment Rate and Nonfarm Payrolls.

Support and resistance
The most proximate support levels 1.1825, a consolidation of price below that level, means the next point would be offset at 1.1718.

Stochastic is in the area of 80 points reflecting it is overbought and that correction is a strong possibility.
Its proximate resistance is set at 1.1962.

Support is expected to be at 1.1825.

USD/JPY Current trend
USD is remaining neutral against JPY, trading within its localized lows, this was renewed the previous day, with the release of less-than-favorable macroeconomic data. Consumer spending came in under expectations, in combination of with the increase of consumer prices causing markets to doubt if the FOMC will actually hike interest rates in December.

The Asian trading session also showed this risk-off sentiment, unsure of how NFP and US employment reports for August at 12:30 (GMT). Forecasts are expecting the US NFP to come in at 180K which is lower than the previous 209K that surpassed by far market expectations.
JPY was boosted slightly by the Nikkei Manufacturing PMI. It August figures show an increase from 52.1 to 52.2 points, a figure significantly below the forecasted 52.8 points.

Support and resistance
Bollinger Bands’ on the daily chart are relatively flat. We see a narrowing of the currency pair’s range, a result of an attempted correction the previous day. MACD histogram is above the signal line has a consistent upwards vector.

Stochastic seems to be rapidly approaching the overbought region, reflecting the strong possibility of a short term the downward relationship developing .

USD/JPY Support levels: 109.82, 109.41, 109.11, 108.58, 108.24.

USD/JPY Resistance levels: 110.23, 110.65, 111.00.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

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