USD/JPY – Steady Ahead of Key US Data

USD/JPY is steady in Wednesday trading. The pair continues to trade close the 100 level in the European session.  In the US, the markets will be busy as there are four key releases on the schedule – Core CPI, Core Retail Sales, Retail Sales and Existing Home Sales. Later on Wednesday, the Federal Reserve will release the minutes of its previous policy meeting. In Japan, Trade Balance was a disappointment, with a larger trade deficit than expected. Wednesday’s only release was All Industries Activity, which came in slightly below the estimate.

Speaking on Tuesday, Fed Reserve Chair Bernard Bernanke said that the Fed remained committed to the current accommodative monetary policy, which stands at $85 billion in asset purchases every month. Bernanke state that the Fed would not taper QE before it was sure that the employment picture continued to improve. Similar sentiments were expressed by Janet Yellen last week when she testified before a senate committee. Yellen is expected to take over as the new head of the Federal Reserve in January.

On Wednesday, the Federal Reserve will release the minutes of its most recent policy meeting. This event is a market-mover and analysts will be paying close attention to the minutes, especially regarding QE. The markets are expecting the Fed to hold off from tapering in December, as US numbers are still not as strong as the Fed would like. Market sentiment is leaning towards the Fed sticking to its present monetary policy, and any surprises in the minutes would likely shake up the currency markets.

In Japan, Trade Balance numbers were weak in October. The deficit showed little change in the October reading, coming in at -1.07 trillion yen. However, this figure was well above the estimate of -0.88 trillion. The larger deficit is being blamed on the rising costs of imports, notably crude oil and natural gas. As well, the weak yen is pushing up import prices, and we are likely to continue to see large monthly deficits.

 

USD/JPY for Wednesday, November 20, 2013

Forex Rate Graph 21/1/13

USD/JPY November 20 at 12:45 GMT

USD/JPY 99.95 H: 100.22 L: 99.80

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
97.18 98.15 98.92 100.00 101.19 102.53

 

  • USD/JPY continues to test the 100 level, which is currently providing weak resistance. Will the pair break through this line? This is followed by resistance at 101.19, which has remained intact since July.
  • The pair continues to receive support at 98.92. This is followed by a support level at 98.15.
  • Current range: 98.92 to 100.00

 

Further levels in both directions:

  • Below: 98.92, 98.15, 97.18 and 96.00
  • Above: 100.00, 101.19, 102.53, 103.30 and 104.17

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions in Wednesday trading. This is reflected in the current movement of the pair, as the pair has edged lower and dropped below the 100 line. Long positions retain a slight majority, indicative of a trader bias towards the US dollar posting gains against the yen.

The pair continues to trade close to the key 100 level. Traders should be prepared for some volatility later in the day, as the US releases a host of key releases, including the Federal Reserve Policy Meeting minutes.

 

USD/JPY Fundamentals

  • 00:00 Fed Chairman Bernard Bernanke Speaks.
  • 4:30 Japanese All Industries Activity. Estimate 0.5%. Actual 0.4%.
  • 13:30 US Core CPI. Estimate 0.1%.
  • 13:30 US Core Retail Sales. Estimate 0.1%.
  • 13:30 US Retail Sales. Estimate 0.1%.
  • 13:30 US CPI. Estimate 0.0%
  • 15:00 US Existing Home Sales. Estimate 5.17M.
  • 15:00 US Business Inventories. Estimate 0.3%.
  • 15:00 FOMC Member William Dudley Speaks.
  • 15:30 US Crude Oil Inventories. Estimate -0.2M.
  • 17:10 FOMC Member James Bullard Speaks.
  • 19:00 US FOMC Meeting Minutes.

 

*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.