USD/JPY – Yen Gains on Weak US Durable Goods

The Japanese yen has posted gains on Tuesday, as USD/JPY trades in the mid-117 range early in the North American session. There are no Japanese releases on Tuesday. In the US, Durable Goods Orders posted a sharp decline of 3.4%. Later in the day, we’ll get a look at CB Consumer Confidence and New Home Sales.

US durable goods orders looked awful in December. Durable Goods Orders plunged 3.4%, marking a 4-month low. There was no relief from Core Durable Goods Orders, which declined by 0.8%, its fifth drop in six readings. The markets had predicted gains for both indicators. The yen took advantage of the weak data, as USD/JPY has gained shed about 100 points on the day.

Japanese corporate inflation remained steady, as the Services Producer Price Index posted a gain of 3.6% in December. The index has posted this figure for three straight months. There was  good news earlier in the week, as the Japanese trade deficit narrowed sharply in December. The deficit dropped to JPY 0.71 trillion, slightly below the estimate of 0.74 trillion and its lowest reading since June 2013.

USD/JPY for Tuesday, January 27, 2015

USD/JPY January 27 at 14:00 GMT

USD/JPY 117.56 H: 118.66 L: 117.50

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
115.56 116.69 117.49 118.69 119.83 120.63

 

  • USD/JPY has posted strong gains on the day and is trading slightly above support at 117.49.
  • 118.69 has strengthened as the pair trades at lower levels.
  • 117.49 is under pressure and could break in the North American session. 116.69 is stronger.
  • Current range: 117.49 to 118.69

Further levels in both directions:

  • Below: 117.49, 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 unchanged on Tuesday. This is not consistent with the pair’s movement, as the yen has posted gains. The ratio currently has a majority of long positions, indicative of trader bias towards the US dollar reversing direction and moving to higher ground.

USD/JPY Fundamentals

  • 13:30 US Core Durable Goods Orders. Estimate 0.6%.
  • 13:30 US Durable Goods Orders. Estimate 0.6%.
  • 14:00 US S&P/CS Composite-20 HPI. Estimate 4.4%.
  • 14:45 US Flash Services PMI. Estimate 53.9 points.
  • 15:00 US CB Consumer Confidence. Estimate 95.3 points.
  • 15:00 US New Home Sales. Estimate 452K.
  • 15:00 US Richmond Manufacturing Index. Estimate 6 points.

*Key releases are highlighted in bold

*All release times are GMT

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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.