USD/JPY – Dollar Rally Continues as 116 in Sight

The Japanese yen continues to lose ground on Tuesday, as USD/JPY trades in the high-116 range. On the release front, Japan will release Tertiary Industry Activity. The markets are expecting good news, with an estimate of 0.9%. In the US, banks will be closed for Veterans Day, so traders can expect reduced liquidity in the currency markets.

Japanese Current Account looked solid, as the current account surplus improved to JPY 0.41 trillion. This easily beat the estimate of JPY 0.03 trillion and marked the highest surplus since August 2013. Despite the good news, the yen continues to slide, surrendering a remarkable 800 points in just two weeks. USD/JPY is close to seven-year highs, and with the BoJ increasing stimulus, the yen’s disappearing act could well continue.

Employment numbers have been strong in the US, and this played a major role in the Fed decision to wind up QE last week. However, US Nonfarm Payrolls, the most important employment indicator, disappointed on Friday. The indicator slipped to 214 thousand, well short of the estimate of 235 thousand. On a brighter note, the unemployment rate slipped to 5.8%, its lowest level in six years. On Thursday, Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low.

 

USD/JPY for Tuesday, November 11, 2014

USD/JPY November 11 at 12:45 GMT

USD/JPY 115.92 H: 116.10 L: 114.64

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
113.68 114.65 115.75 116.66 117.94 118.89

 

  • USD/JPY posted strong gains in the Asian session, breaking past resistance at 115.75. The pair is steady in European trade.
  • 116.66 is an immediate resistance line.
  • 115.75 has reverted to a support role as the yen continues to lose ground. 114.65 is stronger.
  • Current range: 115.75 to 116.66

Further levels in both directions:

  • Below: 115.75, 114.65, 113.68, 112.94 and 110.68
  • Above: 116.66, 117.94, 118.89 and 119.83

 

OANDA’s Open Positions Ratio

USD/JPY is pointing to gains in short positions on Tuesday, reversing the directions we saw a day earlier. This is not consistent with the pair’s movement, as the yen continues to lose ground. The ratio currently has a majority of long positions, indicative of trader bias towards USD/JPY continuing to move upwards.

 

USD/JPY Fundamentals

  • 3:45 Japanese 30-year Bond Auction. Estimate 1.48%.
  • 5:00 Japanese Consumer Confidence. Estimate 40.6 points. Actual 38.9 points.
  • 6:00 Japanese Economy Watches Sentiment. Estimate 49.2 points. Actual 44.0 points.
  • 6:00 Japanese Preliminary Machine Tool Orders. Actual 31.2%.
  • 12:30 US NFIB Small Business Index. Estimate 95.1 points.
  • 23:50 Japanese Tertiary Industry Activity. Estimate 0.9%.
  • 23:50 Japanese M2 Money Stock. Estimate 2.5%.

*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.