- The US dollar is stalling around 147.50 after recovering from session lows near 146.00.
- The pair appreciates 0.8% on the day after a two-day reversal.
- US macroeconomic data has left the dollar looking for direction.
The strong USD rally that occurred during the Asian and European sessions on Friday has run out of steam after hitting 147.85. However, the pair USD/JPY consolidates gains above the 100-hour SMA, following a 0.8% daily appreciation.
The dollar remains afloat after the publication of the US data.
The dollar has lost its bullish momentum in the early stages of the US session, following the publication of a series of leading US macroeconomic indicators. US consumer spending rose at a 0.6% pace in September, according to data released by the Commerce Department, showing that the US economy remains in good health and paving the way for the Fed for another big climb in december.
On the other hand, wage growth slowed to a pace of 1.2% in the third quarter, compared to 1.3% in the previous one, suggesting that inflationary pressures may have peaked.
On the other hand, core personal consumption spending, the Fed’s preferred gauge of inflationary trends, accelerated to an annual rate of 5.1% in September (from 4.9% in August), but below market expectations. market for a 5.2% reading. The general PCE remained stable at an annual rate of 6.2%.
Dovish BOJ sends yen down
Before that, the Japanese yen had pared some of the previous days’ gains, hit by dovish rhetoric from the Bank of Japan’s monetary policy decision. The BOJ has confirmed its accommodative policy, as expected, leaving its short-term rate target at -0.1% and reaffirming its commitment to keep the 10-year bond yield close to 0%.
Furthermore, BOJ Chairman Kuroda has stated that the bank does not plan to “raise interest rates or head for an exit (from current policy) any time soon”, triggering a broad yen reversal.
Technical levels to watch
Source: Fx Street
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