USD/JPY is treading very softly, showing almost no movement in Tuesday trading. In the European session, the pair is trading slightly above the 99 line. In economic news, US releases continue to disappoint. On Monday, Empire State Manufacturing Index came in well below the estimate. The markets are hoping for better news from today’s key event, Core CPI. There are no Japanese releases on Tuesday.
This week’s highlight is the FOMC Statement, scheduled for release on Wednesday, when the Federal Reserve concludes its two-day policy meeting. The markets have been speculating about QE tapering for months, and we could see the Fed take action in the upcoming statement. However, there is a stronger likelihood that QE tapering will not begin till later in the year, as US economic releases, particularly employment data, could be stronger. Traders should be prepared for some volatility from USD/JPY once the FOMC Statement is released.
Bernard Bernanke will step down as head of the US Federal Reserve at the end of January, and the race to replace Bernanke has taken a dramatic twist. Former Treasury Secretary Lawrence Summers was considered the leading contender for the prestigious position. Surprisingly, Summers has withdrawn his nomination, leaving Vice Chairman Janet Yellen as the favored candidate. Yellen is considered dovish and may be hesitant when it comes to QE tapering. The dollar responded to the news of Summers’ withdrawal by losing ground against the major currencies.
What’s ailing the US economy? UoM Consumer Sentiment ended a mostly disappointing week on a sour note. The key indicator dropped from 80.0 points in July to 76.8 in August, its lowest level since March. This weak figure comes on the heels of weak US retail sales releases on Thursday. The new week didn’t start out much better, as Empire State Manufacturing Index, an important release, posted another sharp drop in August. The indicator fell from 8.2 points to 6.3 points. This was way off the estimate of 9.2 points. The markets are hoping that the US can get back on track on Tuesday, with the release of Core CPI, a key event.
USD/JPY for Tuesday, September 17, 2013
USD/JPY September 17 at 11:50 GMT
USD/JPY 99.20 H: 99.35 L: 99.06
- USD/JPY is showing little movement on Tuesday, as the pair trades slightly above the 99 line.
- The pair continues to face resistance at 99.45. This is followed by the all-important 100 level.
- On the downside, USD/JPY is receiving support at 98.43. There is stronger support at 97.83.
- Current range: 98.43 to 99.45
Further levels in both directions:
- Below: 98.43, 97.83, 97.18 and 96.20
- Above: 99.45, 100, 100.85, 101.66 and 102.53
OANDA’s Open Positions Ratio
USD/JPY ratio is unchanged in Tuesday trading. This is reflected in the pair’s current movement, which is trading in a narrow range. The ratio is made up of a solid majority of long positions, indicative of a strong trader bias towards the dollar moving to higher ground.
USD/JPY is showing little movement on Tuesday. We could see some volatility from the pair in the North American session, as the US releases Core CPI, a key release, later in the day.
- 12:15 US Treasury Secretary Jack Lew Speaks.
- 12:30 US Core CPI. Estimate 0.1%.
- 12:30 US CPI. Estimate 0.2%.
- 13:00 US TIC Long-Term Purchases. Estimate -45.3B.
- 14:00 US NAHB Housing Market Index. Estimate 59 points.
*Key releases are highlighted in bold
*All release times are GMT
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