USD/JPY – Steady As Japanese Retail Sales Surge

USD/JPY has edged higher on Monday, as the pair trades in the low-102 range in the European session. Japanese releases started off the week on a positive note, as Retail Sales posted its strongest gains since March 1997. In the US, today’s sole release is Pending Home Sales. The markets are expecting a strong gain for the March release.

With Japan hiking the national sales tax from 5% to 8% on April 1, consumers were expected to spend and spend more in March, before prices jumped. Analysts weren’t disappointed, as Retail Sales jumped 11%, its best showing since March 1997. This was in line with expectations, as the estimate stood at 10.9%. With inflation indicators pointing higher, the government has shifted attention to country’s huge deficit of over $10 billion. The sales tax is expected raise tax revenue and help lower the deficit, but there are concerns that the economy could take a downturn if spending slows down in the private sector.

US consumers appear to be content, as the UoM Consumer Sentiment jumped to 84.1 points in March, beating the estimate of 83.2. It marked the indicator’s highest level since June. If this optimism continues and translates into increased consumer spending, this should bode well for the US economy.

Meanwhile, the US housing sector continues to sputter. New Home Sales was a disaster, as the key indicator plunged to 384 thousand in March, down from 440 thousand in the previous release. The weak reading was nowhere near the estimate of 455 thousand, and marked an eight-month low for the key housing indicator. Earlier in the week, Existing Home Sales showed a slight drop in March, although the indicator did manage to beat the forecast. The markets are expecting better news from Pending Home Sales on Monday, with an estimate of 1.0%.

 

USD/JPY for Monday, April 28, 2014

Forex Rate Graph 21/1/13

USD/JPY April 28 at 12:30 GMT

USD/JPY 102.33 H: 102.38 L: 102.05

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
99.57 100.00 101.19 102.53 103.07 104.17

 

  • USD/JPY has posted gains in Monday trade.
  • 102.53 is a weak resistance line. There is stronger resistance at 103.07.
  • 101.19 continues to provide strong support.
  • Current range: 101.19 to 102.53

Further levels in both directions:

  • Below: 101.19, 100.00, 99.57 and 98.97.
  • Above: 102.53, 103.30, 104.17, 105.70 and 106.85.

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions in Monday trading. This is consistent with the pair’s movement, as the dollar has posted gains. The ratio is made up of a substantial majority of long positions, indicating trader bias towards the dollar continuing to move upwards.

USD/JPY has started the week with gains. The pair has edged higher in the European session.

 

USD/JPY Fundamentals

14:00 US Pending Home Sales. Estimate 1.0%.

*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.