The US dollar has edged higher in Tuesday trading, as USD/JPY trades in the mid-102 range. The yen remains under pressure and has dropped over 100 points this week. In economic news, the US releases the ADP Non-Farm Employment Change, a key event. As well, ISM Non-Farm Manufacturing PMI will be released later in the day. There are no Japanese releases on Wednesday.
Meanwhile, nervous markets are glued to the Ukraine, as Russia has effectively taken over Crimea following the ousting of the Ukrainian president, who has fled to Russia. The US and Russia continue to talk tough as the standoff between Russia and the Ukraine continue. Until this tense situation subsides, traders should be prepared for volatility in the currency markets.
US employment numbers have not looked good, and the markets are not expecting good news from ADP Non-Farm Payrolls later on Wednesday. We’ll get a look at Unemployment Claims and the official Non-Farm Payrolls later in the week. At the moment, the assumption is that the Fed will continue its QE tapering moves also in March, despite recent hiccups in key economic numbers. Speaking before the US Senate last week, Janet Yellen acknowledged the slowdown in the US economy but did not hint about any change in QE tapering. However, forward guidance could certainly be adjusted if the unemployment rate continues falling. The meeting minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%.
USD/JPY for Wednesday, March 5, 2014
USD/JPY March 5 at 13:15 GMT
USD/JPY 102.45 H: 102.47 L: 102.11
- USD/JPY has edged higher in Tuesday trade.
- On the upside, 102.53 is under strong pressure. There is stronger resistance at 103.30.
- 101.19 is providing strong support. Next is the key level of 100.00, which has remained intact since November.
- Current range: 101.19 to 102.53
Further levels in both directions:
- Below: 101.19, 100.00, 99.57 and 98.65
- Above: 102.53, 103.30, 104.17, 105.70, 106.85
OANDA’s Open Positions Ratio
USD/JPY ratio is pointing to gains in short positions in Wednesday trading, continuing the trend we have seen all week. This is not consistent with what we are seeing from the pair, as the dollar has posted modest gains. Long positions continue to comprise a solid majority in the USD/JPY ratio, indicating trader bias towards the dollar continuing to move higher against the yen.
The yen remains under pressure on Wednesday. The pair is steady in the European session.
- 13:15 US ADP Non-Farm Employment Change. Estimate 159K.
- 14:00 US Final Services PMI. Estimate 52.7 points.
- 15:00 US ISM Non-Manufacturing PMI. Estimate 53.8 points.
- 15:30 US Crude Oil Inventories. Estimate 0.9M.
- 19:00 US Beige Book.
*Key releases are highlighted in bold
*All release times are GMT