USD/JPY: Steady as US Nonfarm Payrolls in Spotlight

USD/JPY has edged higher on Thursday, as the pair trades slightly below the 102 line late in the European session. The markets are keeping a close eye on US employment numbers, with the release of Nonfarm Payrolls, the Unemployment Rate and Unemployment Claims. As well, we’ll get a look at US Trade Balance. The only Japanese release on the schedule was the 10-year bond auction, which fetched a slightly lower yield than the previous release.

In the US, ADP Nonfarm Payrolls was outstanding in May, soaring to 281 thousand, up from 179 thousand a month earlier. This crushed the estimate of 207 thousand. Will the official Nonfarm Payrolls follow suit? The markets are expecting a reading of 214 thousand, slightly below the May reading. The Unemployment Rate and Unemployment Claims are also expected to show little change. If there are any surprises from these key indicators, traders can expect some movement in the currency markets during the day.

The Tankan indices are key indicators of the health of the Japanese manufacturing and services sectors, and highly anticipated by the markets. The May data was disappointing, as both indices softened. Tankan Manufacturing Index slipped to 12 points, a three-month low. This was well short of the estimate of 16 points. The Tankan Non-Manufacturing Index dropped to 19 points, down from 24 points a month earlier. On a positive note, this matched the estimate. As well, Japanese Average Cash Earnings posted a respectable gain of 0.8%, matching the forecast.

 

USD/JPY for Thursday, July 3, 2014

USD/JPY July 3 at 11:45 GMT

USD/JPY 101.89 H: 101.96 L: 101.78

 

USD/JPY Technical

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

 

  • USD/JPY has shown little movement in the Asian and European sessions. The pair touched a high of 101.96 earlier in the European session.
  • 102.53 is the next line of resistance line.
  • 101.19 has strengthened in support as the yen trades close to the 102 level . The next support level is the round number of 100, which has held firm since November.
  • 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, 103.07, 104.17 and 105.70

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions in Thursday trade. This is not consistent with the movement we’re seeing from the pair, as the dollar has edged higher. The ratio is made up of a large majority of long positions, indicating strong trader bias towards the dollar continuing to post gains.

 

USD/JPY Fundamentals

  • 3:45 Japanese 10-year Bond Auction. Actual 0.56%.
  • 12:30 US Nonfarm Employment Change. Estimate 214K.
  • 12:30 US Unemployment Claims. Estimate 314K.
  • 12:30 US Unemployment Rate. Estimate 6.3%.
  • 12:30 US Trade Balance. Estimate -45.1B.
  • 12:30 US Average Hourly Earnings. Estimate 0.2%.
  • 13:45 US Final Services PMI. Estimate 61.1 points.
  • 14:00 US ISM Non-Manufacturing PMI. Estimate 56.2 points.
  • 14:30 US Natural Gas Storage. Estimate 100B.

*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.