USD/JPY: Dollar gains as Japanese and US statistics head in opposite directions

USD/JPY was the only major pair to see dollar improvement this week after rising from 105.92 to 106.60 amid improved US statistics while Japanese data for July weakens economic outlook and the yen. Joseph Trevisani, an analyst at FXStreet, expect the pair to continue its climb as the yen bucks the trend.

Key quotes

“The USD weakness over the past month has been based on the supposed economic impact of the second wave of Covid-19 cases in a number of large US states. From the data so far, jobless claims, Nonfarm payrolls and retail sales, it appears the slowdown was minimal if at all.  With a similar rise in positive diagnoses occurring in many European countries and Australia and New Zealand, the economic concern may soon be shifting back to the other side of the dollar pairs. As the data divergence continues expect the dollar to make further gains.”

“Technically the USD/JPY pair crossed the 106.00 and 106.50 resistance lines this week and finishing at 106.60 is poised below three more at 106.80 and 107.00 and 107.30.”