Global macro overview for 10/08/2016:
The Japanese Core Machinery orders have surprised the market participants when they jumped 8.3%, well above the estimate of 3.4% yesterday. This marked the indicator's strongest gain in 5 months. Nevertheless, the deflation remains a serious concern for policymakers as the Producer Price Index has declined 3.9% in July. This means the JPY 28 trillion stimulus package released by Japanese government last week might not be enough to boost the economy and the inflation. In conclusion, despite the overall good economic indicators, the BoJ major monetary tools – lowering interest rates or expanding its asset-purchase program might be used once again very soon.
Let's now take a look at the USD/JPY technical picture at the daily time frame. After hitting the 55-day moving average and the important technical resistance at the level of 106.85 the market reversed and continious to trade around the next important support at the level of 99.95 and 99.01.
