USD/JPY – Dollar Starts Week With Gains

The US dollar has reversed directions after sharp losses against the yen last week. In Monday’s European session, the pair is trading in the mid-102 range. The dollar is on the move after coughing up over 200 points to the yen last week. In economic news, the Bank of Japan released its Monetary Policy Meeting Minutes. Japanese Trade Balance posted a smaller deficit in December, beating the estimate. We’ll get a look at Japanese Corporate Services Price Index later on Monday. In the US, today’s key event is New Home Sales. The markets will be looking for better results than that of Existing Home Sales last week.

Over in the US, Unemployment Claims was unchanged at 326 thousand, another strong reading for one of the most important economic indicators. This beat the estimate of 331 thousand, the third straight week that the reading has surpassed the forecast. US Existing Home Sales was unable to keep pace, however. The key indicator dropped to 4.87 million, down from 4.90M a month earlier and shy of the estimate of the 4.94 million. This was the indicator’s fourth consecutive drop, adding to concern about the health of the US housing industry.

There were no surprises in the minutes of the BOJ’s most recent policy meeting. The Bank said that it will continue to expand the monetary base by 60-70 trillion yen annually and that it will continue its monetary easing until the inflation target of 2.0% is reached. The Bank noted that the Japanese economy continues to recover at a moderate pace and that inflation has picked up. However, inflation still has a long way to go to meet the BOJ’s target, with inflation for 2013 below 1.0%.

 

USD/JPY for Monday, January 27, 2014

Forex Rate Graph 21/1/13

USD/JPY January 27 at 10:55 GMT

USD/JPY 102.62 H: 102.77 L: 102.06

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
100.00 101.19 102.53 103.30 104.17 105.70

 

  • USD/JPY has reversed directions in Monday trading, with the pair posting gains.
  • 103.30 is the next resistance line. This is followed by resistance at 104.17.
  • On the downside, 102.53 is under strong pressure. The next support level is 101.19, which has remained intact since late November.
  • Current range: 102.53 to 103.30

 

Further levels in both directions:

  • Below: 102.53, 101.19, 100.00 and 99.57
  • Above: 103.30, 104.17, 105.70, 106.85 and 107.73

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to long positions in Monday trading. This is consistent with what we are seeing from the pair, as the US dollar has posted gains. Long positions continue to comprise a solid majority in the USD/JPY ratio, indicating trader bias towards the dollar continuing to move to higher ground.

The dollar has posted gains in Monday trading. We could see further movement from the pair in the North American session, as the US releases key housing data later in the day.

 

USD/JPY Fundamentals

  • 23:50 Japanese Corporate Services Price Index. Estimate 1.1%.
  • 14:00 US Flash Services PMI. Estimate 56.2 points.
  • 15:00 US New Home Sales. Estimate 457K.

 

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.