USD/JPY heads towards 104.18, the low set last July

USD/JPY is under selling pressure and trading nearing its daily low at 105.43, with the dollar trading unevenly across the board. The pair is poised to extend its decline, according to the 4-hour chart. On the data front, Japanese core National inflation remained flat in July while US August Markit PMIs are expected to have improved from July final readings, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“Japanese data came in mixed. National CPI ex-fresh food remained flat when compared to a year earlier, missing the market’s expectations of 0.1%. The August preliminary estimate of the Jibun Bank Manufacturing PMI which recovered from 45.2 in July to 46.6, still in contraction territory. 

“The US session will include today the preliminary estimates of the August Markit PMIs. The manufacturing index is foreseen at 51.9, improving from 50.9, while services output is expected at 51 after reaching 50 in July. The country will also publish July Existing Home Sales, seen up by 14.7%.”

“USD/JPY has slid back below all of its moving averages, with the 20 SMA maintaining its bearish slope below the larger ones. The Momentum indicator remains within positive levels, although the RSI heads firmly lower within negative levels, now approaching oversold readings. The pair bottomed this week at 105.09, with a break below it opening the doors for a steeper slide.”