Is the decline of the USD/JPY being supported by the other G‑20 currencies (crosses) as well?

In the weekend New York market, U.S. consumer price index for June and retail sales both undershot expectations, accelerating dollar selling.

The dollar/yen fell below 113 and briefly dropped to the 112.20s.

As the cross yen turned higher, dollar/yen later retraced to the 112.70s at times.

Although closing around the mid-112s, attention turns to the upcoming week as to where the dollar/yen and downside stability may settle.

First, the short-term rally from the 109 level has ended for now, but







on the daily chart, both the 21-day and 200-day moving averages are rising, and around the closing price for the weekend, the 21-day line is positioned, suggesting a first technical support point.

Further down, from the weekend low to the high of 114.49, the 38.2% Fibonacci retracement level awaits below the 109 level.

Additional downside targets include the half retracement, the 200-day moving average, and the lagging line approaching the cloud.




★ From the start of the week, watch whether the cross currencies will be pulled up by the dollar index.


Moreover, with the Dow not collapsing and the cross currencies showing a tailing move,

if no other concerns about the U.S. dollar arise, the chances of a large breakdown are limited.

With Tokyo closed at the start of the week, position adjustments are also in play,

so keep an eye on the yen in the days ahead starting Tuesday.

With many concerns between the U.S. and Japan leadership, the U.S. has announced appointing a veteran former federal prosecutor as White House legal adviser, which is seen as preparing for the Russia inquiry.

Domestically, with Abe cabinet support declining, GPIF’s fiscal year 2016 investment earnings turning a large 8 trillion yen surplus have finally demonstrated the underpinning strength of Abenomics,



the Nikkei Stock Average stabilizing around 20,000 yen, and the near-term break of the 2300 high is a condition,

which could be one of the drivers that push the dollar/yen higher.





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