Global macro overview for 27/12/2016:
National Consumer Price Index (CPI) is the key gauge for inflation in Japan and the newest CPI data, together with household spending, were released overnight. Japanese Household Spending and Tokyo Core CPI both missed their estimates as consumer data was soft. Household Spending declined 1.5%, marking a ninth straight decline, while the market participants had expected 0.2% increase from -0.4% decline a month ago.The Tokyo CPI (ex.fresh food) indicator came in at -0.6%, weaker than the estimate of -0.4%. Nevertheless, the National CPI index was better than anticipated. The number released was at the level of 0.5%, which was better than 0.1% a month ago. In conclusion, the Japanese economy continues to grapple with deflation, so the Bank of Japan inflation target of 2.0% will not be realized any time soon.
Let's now take a look at the USD/JPY technical picture at the daily time frame. After the impressive rally from 101 level, the bull are taking a break as the market stalled below the technical resistance at the level of 118.65. The bulls are still in control over this market, but a bearish divergence between the price and the momentum oscillator indicated a possible correction toward the next techncial support at the level of 116.15.
From www.instaforex.com http://ift.tt/2iavRwC
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