USD/JPY – Close to 103 As Yen Under Pressure

USD/JPY is trading just below the 103 level in Friday trade. The yen continues to struggle and has given up about 160 points this week. In the US, Unemployment Claims dropped sharply on Thursday. In Friday news, there was only Japanese release, as Leading Indicators met expectations. It’s a busy day in the US, with three key events on the schedule – Nonfarm Payrolls, the Unemployment Rate and Trade Balance.

In the US, all eyes are on Nonfarm Payrolls, which will be released together with the Unemployment Rate later on Friday. US employment numbers have been a mix so far this week, as ADP Nonfarm Payrolls was well below the estimate, but Unemployment Claims dropped to its lowest level since December. Even if today’s numbers aren’t great, we can expect the Fed to take the scissors and trim QE at its meeting next week.  New York Fed President William Dudley said as much on Thursday when he stated that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.

It’s not only soft US employment numbers that are raising concerns about the health of the US economy. ISM Non-Manufacturing PMI dropped in January and missed the estimate. GDP also weakened in February, and recent housing numbers have not impressed. The US dollar continues to make inroads at the expense of the Japanese yen, but this trend could end if the markets don’t see better numbers from the US economy.

USD/JPY for Friday, March 7, 2014

USD/JPY March 7 at 10:40 GMT

USD/JPY 102.95 H: 103.09 L: 102.84

USD/JPY Technical

• 103.30 is providing resistance. This line has weakened as the dollar improves and could face pressure during the day. This is followed by 104.17, which has remained intact since late January.
• 102.53 is the first support level. There is stronger support at 101.19.
• Current range: 102.53 to 103.30

Further levels in both directions:

• Below: 102.53, 101.19, 100.00, 99.57 and 98.65
• Above: 103.30, 104.17, 105.70, 106.85

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions in Friday trading, continuing the trend we have seen for most of this week. This is consistent with what we are seeing from the pair, as the dollar has posted slight losses. Short positions make up about half of the open positions in the ratio, indicating a lack of trader bias as to what direction we’ll see from USD/JPY.

The dollar is steady on Friday, as USD/JPY is trading just below the 103 level.

USD/JPY Fundamentals

• 5:00 Japanese Leading Indicators. Estimate 112.4%. Actual 112.2%.
• 13:30 US Nonfarm Employment Change. Estimate 151K.
• 13:30 US Trade Balance. Estimate -39.1B.
• 13:30 US Unemployment Rate. Estimate 6.6%.
• 13:30 US Average Hourly Earnings. Estimate 0.2%.
• 17:00 US FOMC Member William Dudley Speaks.
• 18:00 US Consumer Credit. Estimate 14.6B.

*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.