Usually when economic data is disappointing, the related currency declines. That makes sense because worsening economic conditions mean that the central bank will lose the monetary policy, while the government will likely expand the fiscal policy by throwing money at public investments.
So, the more money around in circulation, the cheaper it becomes. That´s the reason why we often see major currencies lose hundreds of pips in minutes after some bad economic numbers.
However, that´s not the case with the Japanese Yen. Time after time, we have seen JPY get massive bids when the Japanese economic data misses badly.
That was the case this morning during the Tokyo trading session. The numbers from Japan were disappointing, tertiary industry activity remained flat when it was expected to pick up by 2 points, and core machinery orders declined by 3.2%.
These are terrible numbers. However, USD/JPY dived instead of moving higher, thus threatening our live forex signal here. We opened that signal last Friday during the retrace down in the late afternoon after the strong uptrend which led to the break of 115.
That retrace doesn´t seem to be over yet, but at least the 100 SMA on the hourly forex chart is keeping us afloat for now, although the stop loss is not too far away. The Euro has been losing ground against the Buck in the last couple of hours, so let´s hope JPY starts doing the same soon and USD/JPY reverses higher.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals