USD/JPY – Higher on Positive Chinese GDP

The Japanese yen has posted losses on Tuesday as USD/JPY trades in the mid-118 range on Tuesday. It’s a quiet day on the release front, with NAHB Housing Market Index the sole indicator on the calendar. There are no Japanese releases on Tuesday, but the BOJ will release its monthly policy statement early on Wednesday. In China, GDP remained steady at 7.3% in Q4.

USD/JPY moved higher on Tuesday, as Chinese GDP came in at 7.3% for Q4, edging above the estimate of 7.2%. This eased worries about a slowdown in China, the world’s second largest economy, as GDP kept up with its pace in Q3. The yen was trading below the 116 line last week, but has taken a beating since then, surrendering about 250 points.

It has been less than a week since the SNB stunned the markets by suddenly removing its cap with the euro. However, the markets have had to quickly change focus, as there is growing anticipation that the ECB will announce a QE package on Thursday, when the ECB meets for a crucial policy meeting. The Eurozone has been plagued by deflation and weak growth, and the SNB shocker only reinforces the belief that the ECB will finally make a move. Even if QE has been priced in, there’s no way to know the size of such a scheme, so traders could be in for further volatility in the currency and commodity markets later in the week.

USD/JPY for Tuesday, January 20, 2015

USD/JPY January 20 at 14:00 GMT

USD/JPY 118.54 H: 118.77 L: 117.70

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
115.56 116.69 117.94 118.69 119.83 120.63

 

  • USD/JPY moved higher in the Asian session. The trend has continued in the European session, with the pair testing resistance at 118.69.
  • On the upside, 118.69 is under pressure. Will the pair break above this line?
  • 117.94 is a weak support line. 116.69 is stronger.
  • Current range: 117.94 to 118.69

Further levels in both directions:

  • Below: 117.94, 116.69, 115.56, 113.64 and 112.41
  • Above: 118.69, 119.83, 120.63 and 121.69

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Tuesday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the yen has posted strong losses. The ratio currently has a majority of long positions, indicative of trader bias towards the yen reversing directions and moving to higher ground.

USD/JPY Fundamentals

  • 15:00 US FOMC Member Jerome Powell Speaks.
  • 15:00 US NAHB Housing Market Index. Estimate 58 points.

*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.