Global macro overview for 19/07/2017:
Trump's administration failure of the reform of the health care system in the US (Obamacare) maintains the weakness of the Dollar together with the recent hawkish European Central bank rhetoric and downbeat recent data from the US economy. American President is unlikely to fulfill any changes in the health system (Obamacare), pledged during the presidential campaign. The bill passed in the House of Representatives will not find a majority in the Senate after two members of the ruling party have withdrawn in recent days. The efforts of M. McConnell, who is the head of the republican majority in the Senate also failed to find support for the bill, replacing Obamacare with a two-year transitional period. President Trump, as he said, is disappointed with senators' approach towards his reform. His plan to change the existing legislation that generates enormous costs for the US budget is simple: "let the Obamacare fall" and then the Democrats who are blocking the pass will ask for its change anyway.
Trump's administration problems are negatively impacting the US Dollar, which is sliding down through multi-month lows. The nearest chance for US Dollar to rebound comes with tomorrow's European Central Bank interest rate decision and press conference, but the economic and political pressures on the market will still be present in the background.
Let's now take a look at the USD/JPY technical picture on the H4 time frame. After a fallout of the golden channel, the price hit the 50%Fibo retracement and bounced slightly. Nevertheless, the bulls do not look so strong despite the oversold market conditions. The next important technical resistance is seen at the level of 112.74 - 112. 92 any only a sustained breakout above this level will put the bulls back in control over this market.
