USD/JPY – U.S. Consumer Sentiment Plunged To 10-Year Low

#OPINIONLEADER# #Signal#

 AUG 16, 2021

• Gloomy economic outlook amid rising COVID cases in the U.S.
• Potential downside for USD/JPY if 109 handle is breached

Chart 1: USD/JPY D1 chart

The University of Michigan consumer sentiment data reported a gloomy outlook painted by consumers as the COVID Delta variant continues to push the number of infected cases higher. The index fell to a 10-year low reading of 70.2 in its preliminary release as opposed to the expectation of remaining at the same level. The rapid spreading of the virus across the U.S. has led to the resumption of COVID restrictions such as masking requirement. To make matter worse, there are reports of a shortage of bed in the hospitals of Mississippi state. As a result, the U.S. dollar weakened across the board.

At the moment, USD/JPY is trading with a downward momentum towards the 109 handle as shown by our technical indicators. Breaching below the 109 handle will present us with selling opportunities of USD/JPY.

Trade Setup for USD/JPY (D1)

Sell Stop at 108.600

Upcoming major news that may impact price movement of USD/JPY

17 August – U.S. retail sales m/m data releases at 2030 (GMT+8)

18 August – U.S. Federal Reserve Chairman Powell speaking at 0130 (GMT+8)

18 August – U.S. housing data releases at 2030 (GMT+8)

19 August – U.S. Federal Reserve monetary policy meeting minutes release at 0200 (GMT+8)

23 August – U.S. Flash PMI data releases at 2145 (GMT+8)

26 August – U.S. Preliminary GDP q/q data release at 2030 (GMT+8)

27-29 August – Jackson Hole Symposium (GMT+8)