Forex trading USDJPY Yen bullish

USDJPY continued building on its downward move from the past two days to touch 86.98 this morning – approaching the lowest level in 2010. The Yen's bullish move really picked up when the Fed adjusted its forecasts for future growth and since, has been in a downward spiral gathering steam with each piece of negative economic data coming from the US; first the lower US manufacturing number and a rather disappointing Google earnings report (Q2 Profit per share 6.45 actual v 6.521 exp). The weaker economic and equity earnings data from the US has kept Asian equities in the red; with the Nikkei lower by -2.86% at the time of writing. The NZDUSD dropped from 0.7300 levels after data from New Zealand showed CPI was marginally lower on both the QoQ and YoY reading (QoQ -0.3% actual v 0.4% previous, YoY 1.8% actual v 2.0% previous). The Kiwi dropped more than 1.5% to 0.7170 after the news. The weaker CPI data and poorer housing sales from June will certainly buy Central bank governor Bollard time to raise rates. Meanwhile next door the AUDUSD pair was weaker before finding some minor support at 0.8745 levels. With the compounding bad data from the US, the AUDUSD looks vulnerable (as a growth currency) but will be waiting for the last important piece of data – the US CPI reading (1230 GMT) to establish how it will close a rather mixed trading week.

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