USDJPY TECHS: Sharp Downstep
- RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 3: 150.92 High Aug 1 and a key resistance
- RES 2: 149.81 76.4% retracement of the Aug 1 - 14 bear leg
- RES 1: 149.12 61.8% retracement of the Aug 1 - 14 bear leg
- PRICE: 146.74 @ 16:40 BST Aug 22
- SUP 1: 147.26/146.21 20-day EMA / Low Aug 14
- SUP 2: 145.86 Low Jul 24
- SUP 3: 145.40 50% retracement of the Apr - Aug upleg
- SUP 4: 144.80 Trendline drawn from the Apr 22 low
USDJPY slipped sharply into the Friday close on broad USD weakness, erasing much of the week’s rally ahead of Powell’s appearance. The bear trigger has been defined at 146.21, the Aug 14 low. Clearance of this level would reinstate a bear theme. Any reversal higher initially targets 149.12 next, a Fibonacci retracement. Key resistance is far off at 150.92, the Aug 1 high.
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USDJPY TECHS: Remains Above The 50-Day EMA
- RES 4: 151.21 High Mar 28
- RES 3: 150.49 High Apr 2
- RES 2: 149.38 50.0% retracement of the Jan 10 - Apr 22 bear leg
- RES 1: 147.95/149.18 High Jul 22 / 16 and the bull trigger
- PRICE: 146.39 @ 16:08 BST Jul 23
- SUP 1: 146.20 Low Jul 23
- SUP 2: 145.88 50-day EMA
- SUP 3: 144.23 Low Jul 7
- SUP 4: 142.68 Low Jul 1 and a key support
A bull cycle in USDJPY remains in place despite the latest pullback - a correction. Short-term pivot support to monitor is 145.88, the 50-day EMA. A clear break of this level would highlight a stronger reversal. Recent strength resulted in a breach of resistance at 148.03, the Jun 23 high, and a move through key resistance at 148.65, the May 12 high. The break strengthens the bullish theme and opens 149.38, a Fibonacci retracement.
US: Trump Approval On Handling Of Inflation Nears Biden-Era Lows
A new survey from YouGov has found: “More Americans disapprove than approve of Trump's handling of all six issues asked about in this week's poll: national security (-2 net approval), immigration (-6), foreign policy (-11), jobs and the economy (-12), foreign trade (-15), and inflation/prices (-29)”
- YouGov notes: “Trump's approval on inflation and prices is nearly as low as the lowest score Joe Biden received during his presidency.”
- The report notes: “Inflation and prices is the issue Americans are most likely to name as their most important issue, with 21% picking it. That's more than choose jobs and the economy (14%), health care (10%), and immigration (9%)”
- According to Silver Bulletin's approval aggregator, Trump's approval rating on inflation is roughly -26%, suggesting that the YouGov survey is not an outlier.
Figure 1: “Donald Trump's net approval on inflation is approaching the low mark of Joe Biden's presidency” (Biden blue line/ Trump red line)
Source: YouGov
TARIFFS: Navarro: Take EU-US Trade Deal Reports With "Grain Of Salt"
A brief risk-off move on a comment by White House adviser Peter Navarro on Bloomberg TV referring to earlier reports of a EU-US trade deal nearing completion that would include a 15% baseline tariff - Navarro says:
- "We don't negotiate in public. These other countries aspirationally negotiate in public to try to get us to where they want us to go. I would say even though it was reported on Bloomberg, I would take it with a grain of salt. Never assume anything is fixed until the boss says it is fixed... Let's see what happens."
- Navarro's comments weren't quite as concrete as initially feared from the headlines ("*NAVARRO ON US-EU DEAL REPORT: TAKE IT WITH A GRAIN OF SALT" -bbg) so the risk-off move (worth about 10 points in the S&P) quickly reversed.
- Immediate focus is on a reported EU member state vote on tariff countermeasures Thursday in case a deal can't be reached with the US by Aug 1.
