USD/JPY – Dollar Firm To Start Off Week

The USD/JPY continues to trade at high levels as we begin the new trading week. In Monday’s European session, the pair is trading in the mid-102 range. In Japan, the markets are back in action after a holiday on Friday, but there are no releases out of Japan. Over in the US, there is just one release on the schedule, Flash Manufacturing PMI.

The US dollar surged against its major rivals following the Federal Reserve’s policy meeting on Wednesday, the first meeting headed by Janet Yellen. The decision to trim QE by another $10 billion was widely expected, but her comments at the follow-up press conference gave the dollar a big boost against its major rivals. Yellen said that the Fed was on track to wind up QE in the fall, and could start to raise interest rates six months later. This is a more aggressive approach towards higher rates than the markets had expected, and the dollar responded by posting strong against the yen.

The Ukrainian crisis is deepening. Russian President Vladimir Putin signed a deal on Friday which formally annexed Crimea to Russia, while Western countries are scrambling to respond to Russia’s lightning takeover of the Ukrainian region. The commander of U.S. and NATO forces in Europe said that Russia had assembled a large force on Ukraine’s eastern border and could attack at any time. Meanwhile, Ukraine says it has ordered its troops in Crimea to withdraw to the mainland, in order to de-escalate the extremely tense situation. The troop withdrawal marks a tacit recognition of the Russian annexation of Crimea.

USD/JPY for Monday, March 24, 2014

USD/JPY March 24 at 12:45 GMT

USD/JPY 102.50 H: 102.64 L: 102.25

USD/JPY Technical

• The dollar remains firm in Monday trading.
• USD/JPY is testing resistance at 102.53. This is followed by strong resistance at 103.30.
• 101.19 is providing support. The next support line is the key level of 100.00, which has held firm since last November.
• Current range: 101.19 to 102.53

Further levels in both directions:

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

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged on Monday. This is not consistent with the pair’s movement, as the dollar has edged higher. Long positions make up a majority of the open positions in the ratio, indicating trader bias towards the dollar moving higher.

The yen is trading quietly on Monday, with USD/JPY showing little movement in the European session.

USD/JPY Fundamentals

• 13:45 US Flash Manufacturing PMI. Estimate 56.6 points.
• All Day – G7 Meetings.

*Key releases are highlighted in bold

*All release times are GMT

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