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USD/JPY Forecast 8 July 2016

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USD/JPY Forecast 8 July 2016
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The economic data shows the ineffectiveness of the Japanese government actions.

Today the balance of payments showed a decrease from 1.63 trillion yen to 1.41 trillion yen against the forecast of 1.52 trillion.

The volume of bank lending reduced - this time, it fell from 2.2% to 2.0%. In May, the average cash earnings decreased by 0.2%, while investors expected growth of 0.5%.

Yesterday the head of the Bank of Japan Kuroda said the current quantitative easing program will be continued till the target level of 2.0% will be reached. However, the pair USD/JPY is descending sixth consecutive sessions.

Today, all the attention is focused on change in Nonfarm Payrolls. The forecast is 165K-180K vs. 38K in May.

The overall unemployment rate may be slightly corrected after the previous decline to 4.7%. However, the average hourly earnings are forecasted to grow by 0.2%. The consumer credit is forecasted to grow from 13.4 billion to 16.7 billion in May.

If nonfarm payrolls data is positive, the pair USD/JPY may rise to the 101.30 area. If the data is weak, the pair may fall to the 99.30 area.

How to trade

We would buy call options if the pair rises above 100.93. We would buy put options if the pair falls below 100.28.

Expiry time: 20:00

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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