USD/JPY – Little Movement Ahead of US Unemployment Claims

USD/JPY is showing little movement on Thursday, as the pair trades in the mid-98 range in the European session. Today’s highlights are out of the US – Advance GDP and Unemployment Claims. In Japan, Leading Indicators came in very close to the estimate.

The BOJ released the minutes of its last policy meeting earlier in the week, and the board’s members were cautiously optimistic about the economy, referring to the economic recovery as “moderate”, stating that exports had picked up, and other sectors such as consumer spending and industrial production were stable. The Bank noted that inflation was increasing and moving towards the target of 2%. The BOJ said it would continue to expand the monetary base by 60-70 trillion yen per year, and maintain the purchase of government bonds by 50 trillion yen each year.

Speaking to a group of business leaders in Osaka, BOJ head Haruhiko Kuroda expressed confidence that the Bank would successfully reach its inflation target of 2.0% by 2015. However, many analysts are skeptical that this goal will be met, as National Core CPI rose just 0.7% in September. The yen’s drop of about 12% in 2013 has provided some inflation by increasing import prices, but growth will have to improve if the inflation target is to be reached.

US key releases have started the week on a positive note. The ISM Non-Manufacturing PMI rose to 55.4 points in October, up from 54.4 the month before. This beat the estimate of 54.0 points. We’ll get a look at Unemployment Claims on Thursday and Non-Farm Payrolls on Friday, and if these numbers are strong, there is sure to be talk of QE tapering in December, as the Fed has said on numerous occasions that the employment market must improve before QE tapering can occur.

 

USD/JPY for Thursday, November 7, 2013

Forex Rate Graph 21/1/13

USD/JPY November 7 at 12:25 GMT

USD/JPY 98.70 H: 98.75 L: 98.56

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
96.00 97.18 98.15 98.92 100.00 101.19

 

  • USD/JPY is showing very little movement in Thursday trading, as the pair trades in the mid-98 range.
  • On the downside, 98.15 continues to provide support. This is followed by strong support at 97.18.
  • On the upside, the pair is facing resistance at 98.92. This is a weak line and could be tested if the dollar shows any strength. This line is followed by the key level of 100, which has held firm since mid-September.
  • Current range: 98.15 to 98.92

 

Further levels in both directions:

  • Below: 98.15, 97.18, 96.00, 95.06 and 94.20
  • Above: 98.92, 100, 101.19 and 102.53

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions, continuing the trend we have seen most of the week. This is not reflected in the current movement of the pair, which is showing little movement. The ratio continues to be dominated by long positions, indicative of a strong trader bias towards the US dollar moving higher.

The pair continues to trade quietly in the mid-98 range. We could see some activity from the pair during the North American session, with the release of key GDP and employment data out of the US later in the day.

 

USD/JPY Fundamentals

  • 5:00 Japanese Leading Indicators. Estimate 109.4%. Actual 109.5%.
  • 13:30 US Advance GDP. Estimate 2.0%.
  • 13:30 US Unemployment Claims. Estimate 336K.
  • 13:30 US Advance GDP Price Index. Estimate 1.5%.
  • 15:30 US Natural Gas Storage. Estimate 40B.
  • 18:30 FOMC Member William Dudley Speaks.
  • 18:50 FOMC Member Jeremy Stein Speaks.
  • 20:00 US Consumer Credit. Estimate 13.0B.

 

*Key releases are highlighted in bold

*All release times are GMT

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.