USD/JPY – Yen Stable as US GDP Sparkles

USD/JPY is showing limited movement on Tuesday, as the pair trades in the low-118 range. The yen remains at the lowest levels we’ve seen since August 2007. Will we see a 120 yen this week? On the release front, the BoJ Governor Kuroda said that the economy was on track to meet inflation targets, but noted that the yen was falling too quickly. In the US, GDP jumped 3.9% in Q3, beating expectations.

The US economic growth continues to rack up impressive numbers, posting an excellent gain of 3.9% in Q3, well above the estimate of 3.3%. This followed a gain in Q2 of 4.2%, which also beat the estimate. We’ll get a look at Consumer Confidence later in the day. The markets are expecting the indicator to improve in November, with an estimate of 95.9 points.

The struggling Japanese economy has officially slipped into recession, as GDP has posted two straight declines. In Q3, GDP declined -0.4%, well below the estimate of 0.5%. Prime Minister Abe responded by delaying an increase in the sales tax to 10%. Abe then surprised the markets by announcing elections halfway through his term. The upcoming election could end up as a referendum on Abenomics, which has involved sharp monetary easing and heavy government spending.

USD/JPY for Tuesday, November 25, 2014

USD/JPY November 25 at 14:15 GMT

USD/JPY 118.16 H: 118.46 L: 117.69

USD/JPY Technical

• USD/JPY lost ground in the Asian session, testing support at 117.94. The pair rebounded in the European session, recovering much of the losses from earlier in the day.
• 117.94 a weak support level. 116.66 is stronger.
• 118.89 is the next line of resistance.
• Current range: 117.94 to 118.89

Further levels in both directions:

• Below: 117.94, 116.66, 115.75, 114.65 and 113.68
• Above: 118.89, 119.83, 120.63 and 121.39

OANDA’s Open Positions Ratio

USD/JPY ratio has a majority of long positions, indicative of trader bias towards the dollar moving to higher ground.

USD/JPY Fundamentals

• 1:00 BoJ Governor Kuroda Speaks.
• 13:30 US Preliminary GDP. Estimate 3.3%. Actual 3.9%.
• 13:30 US Preliminary GDP Price Index.  Estimate 1.3%. Actual 1.4%.
• 14:00 US HPI. Estimate 0.5%. Actual 0.0%.
• 14:00 US S&P/CS Composite-20 HPI. Estimate 4.7%. Actual 4.9%.
• 15:00 US CB Consumer Confidence. Estimate 95.9 points.
• 15:00 US Richmond Manufacturing Index. Estimate 17 points.

*Key releases are highlighted in bold

*All release times are GMT

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