USD/JPY – Dollar Flirts With 104 As US Employment Data Shines

USD/JPY continues to trade at high levels as the pair trades in the mid-103 range in Wednesday’s European session. The pair came close to the 104 line, its highest level since late January. In the US, ADP Nonfarm Payrolls posted a sharp gain, matching expectations. There are no Japanese releases on Wednesday.

The first US employment release of the week met high expectations, as ADP Nonfarm Payrolls jumped to 191 thousand, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand. The markets will get a good look at the US employment picture in the next few days, with Unemployment Claims, the Unemployment Rate and NFP still to come.

Japanese Tankan indexes are important indices which provide a glimpse of the health of the Japanese economy. The releases were a mix in Q1, and the yen did not show much reaction. The Manufacturing Index rose slightly to 17 points, falling short of the estimate of 19 points. However, the Non-Manufacturing Index showed a significant upturn, jumping to 24 points from 20 points, matching the forecast. On Monday, Preliminary Industrial Production starting off the week with a whimper, declining 2.3% in February, an eight-month low.

Earlier in the week, Fed chair Janet Yellen said that inflation and employment levels needed to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

USD/JPY for Wednesday, April 2, 2014

USD/JPY April 2 at 13:35 GMT

USD/JPY 103.65 H: 103.93 L: 103.61

USD/JPY Technical

• USD/JPY is showing little movement in Wednesday trade. The pair touched a high of 103.93 in the Asian session.
• 104.17 is the next resistance line. This is followed by 105.70, which has not been tested since October 2008.
• On the downside, 103.30 remains under pressure. The next support line is 102.53.
• Current range: 103.30 to 104.17

Further levels in both directions:

• Below: 103.30, 102.53, 101.19, 100.00 and 99.57
• Above: 104.17, 105.70, 106.85 and 107.80.

OANDA’s Open Positions Ratio

USD/JPY ratio is showing gains in short positions on Wednesday, continuing the trend we have seen since last week. This is consistent with the pair’s movement, as the yen has posted very slight gains. The ratio is now close to evenly split, indicating a lack of trader bias as to what direction the pair will take.

USD/JPY remains at high levels and is within striking distance of the 104 line. The pair has edged lower in the European session.

USD/JPY Fundamentals

• 12:15 US ADP Nonfarm Employment Change. Estimate 192K. Actual 191K.
• 14:00 US Factory Orders. Estimate 1.3%.
• 14:30 US Crude Oil Inventories. Estimate 1.3M.

*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.