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FOREX: USD Falls After Lower PCE Numbers. AUD, NZD Off Yearly Lows, JPY Weak

FOREX
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The BBDXY fell 0.53% on Friday, after closely-watched November inflation figures came in lower than expectations, weighing on Treasury yields. Core PCE inflation for November was marginally softer than detailed unrounded estimates, at 0.115% M/M vs estimates that we had seen averaging 0.13-0.14% M/M (it looked a larger miss compared to the 0.2% median estimate in the Bloomberg survey). 

  • The Japanese yen is the best performer in the G10 currency on Friday, with lower US yields boosting the JPY. USDJPY fell -0.9% however this should be taken in relation to the impressive 2.75% advance over the Fed and BOJ meetings on Wednesday/Thursday. Additionally, we had FinMin Kato come across the wires stating he was deeply concerned about FX moves, which was followed up by Chief FX Diplomat Mimura who also expressed deep concern around FX moves. The USD/JPY has opened slightly higher this morning at 156.38.
  • USDJPY bullish conditions remain intact and Thursday’s gains reinforce current conditions. Thursday’s breach of 156.75, the Nov 15 high and bull trigger, strengthens bullish conditions. The move higher has confirmed a resumption of the uptrend and opens 159.45, the Jul 12 high. Initial firm support is 153.05, the 20-day EMA. A pullback would be considered corrective.
  • The AUD/USD closed 0.19% higher at 0.6250 on Friday, and remains trading just off the yearly lows made on Dec 19th of 0.6199. The AUD/USD pair experienced a bearish week, pressured by strong US economic data. Technically, The trend needle in AUDUSD continues to point south and last week’s fresh cycle lows and Wednesday’s sell-off, reinforce a bear theme. The move down maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The break lower opens 0.6158 next, a Fibonacci projection. Initial firm resistance to watch is 0.6371, the 20-day EMA.
  • NZD/USD closed 0.37% higher at 0.5652, after hitting a yearly low of 0.5608 on Dec 19th. The pair looks vulnerable to test of 0.55 into year-end but downside action may be choppy given the RSI is in oversold territory at 29.5.
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The BBDXY fell 0.53% on Friday, after closely-watched November inflation figures came in lower than expectations, weighing on Treasury yields. Core PCE inflation for November was marginally softer than detailed unrounded estimates, at 0.115% M/M vs estimates that we had seen averaging 0.13-0.14% M/M (it looked a larger miss compared to the 0.2% median estimate in the Bloomberg survey). 

  • The Japanese yen is the best performer in the G10 currency on Friday, with lower US yields boosting the JPY. USDJPY fell -0.9% however this should be taken in relation to the impressive 2.75% advance over the Fed and BOJ meetings on Wednesday/Thursday. Additionally, we had FinMin Kato come across the wires stating he was deeply concerned about FX moves, which was followed up by Chief FX Diplomat Mimura who also expressed deep concern around FX moves. The USD/JPY has opened slightly higher this morning at 156.38.
  • USDJPY bullish conditions remain intact and Thursday’s gains reinforce current conditions. Thursday’s breach of 156.75, the Nov 15 high and bull trigger, strengthens bullish conditions. The move higher has confirmed a resumption of the uptrend and opens 159.45, the Jul 12 high. Initial firm support is 153.05, the 20-day EMA. A pullback would be considered corrective.
  • The AUD/USD closed 0.19% higher at 0.6250 on Friday, and remains trading just off the yearly lows made on Dec 19th of 0.6199. The AUD/USD pair experienced a bearish week, pressured by strong US economic data. Technically, The trend needle in AUDUSD continues to point south and last week’s fresh cycle lows and Wednesday’s sell-off, reinforce a bear theme. The move down maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The break lower opens 0.6158 next, a Fibonacci projection. Initial firm resistance to watch is 0.6371, the 20-day EMA.
  • NZD/USD closed 0.37% higher at 0.5652, after hitting a yearly low of 0.5608 on Dec 19th. The pair looks vulnerable to test of 0.55 into year-end but downside action may be choppy given the RSI is in oversold territory at 29.5.