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USD/JPY – Higher As Markets Eye US Manufacturing Release

USD/JPY continues to move higher in Tuesday trading. In the European session, the pair has climbed across the 103 line. The dollar has recovered a large part of last week’s losses, having gained about 100 points since the start of the week. In economic news, Japanese Corporate Services Price Index posted a gain of 1.3%, beating the estimate. In the US, there are two key events on the schedule – Core Durable Goods Orders and CB Consumer Confidence. There are no Japanese releases on Tuesday.

The US housing sector continues to post worrying numbers. New Home Sales dropped sharply to 414 thousand, down from 464 thousand a month earlier. This was nowhere near the estimate of 457 thousand. This follows a disappointing Existing Home Sales release last week. The key indicator dropped to 4.87 million, down from 4.90 million a month earlier and shy of the estimate of the 4.94 million. This was the indicator’s fourth straight drop. The markets will be hoping for better news from Pending Home Sales on Thursday. A third straight housing reading below the estimate could weigh on the dollar.

There were no surprises in the minutes of the BOJ’s most recent policy meeting, which were released on Monday. 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. This was underscored by the Corporate Services Price Index, which continues to climb, posting a gain of 1.3%, above the estimate of 1.1%.  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 Tuesday, January 28, 2014

Forex Rate Graph 21/1/13

USD/JPY January 28 at 12:50 GMT

USD/JPY 103.08 H: 103.25 L: 102.53

 

USD/JPY Technical

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

 

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

USD/JPY ratio has reversed directions in Tuesday trading and is pointing to gains in short positions. This is not consistent with what we are seeing from the pair, as the US dollar continues to post 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 is pointing upwards and bounced back to 103 territory. We could see further movement from the pair in the North American session, as the US releases key manufacturing and consumer confidence numbers later in the day.

 

USD/JPY Fundamentals

 

*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 [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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