What’s next? – USDJPY 06.12.17

The dollar was trading 0.37 percent lower vs the Japanese yen at 112.16 as of 05:35 GMT, with investors awaiting for fresh data in search direction.

The US dollar index, which gauges the American currency against six major rivals, was trading at 93.18 by the time of this writing, down 0.16 percent.

In the previous session, the dollar extended gains following the approval of Republican-drafted tax reform bill by the Senate, meant to cut taxes to boost economic growth and inflation levels.

That would push the Federal Reserve to increase interest rates at a faster pace, and maybe even consider ramping up the plan to unwind the regulator’s massive balance sheet.

Reports released in the last few days are suggesting a joint resolution between the Senate and the House of Representatives will be ready before Christmas.

In the US agenda today, focus will be directed to the ADP nonfarm employment change for November, a report that anticipates official NFP on Friday.

Support for the greenback today is easing, specially following downbeat activity data in the services sector. The ISM non-manufacturing PMI fell short on expectations at 57.4 in November from a predicted 59.0 reading and a prior month 60.1.

In other news, the Commerce Department said the trade deficit expanded in October from $44.90 billion to $48.70 billion, above an estimated growth to $47.50 billion.

If the downtrend gains momentum and the 112 mark gets broken, we could see an extension to the 111 level and further, although that one is expected to offer strong support for the pair.

On the contrary, a break above 113 would open the gates to further growth up to 114.5 and 115.0 depending on the intensity of the bullish dynamic.

Fort Financial Services