USD/JPY – Flat Ahead of US Key Data

USD/JPY is listless in Thursday trade, as the pair continues to trade in the mid-102 range early in the North American session. On the release front, Japanese Corporate Services Price Index met expectations. We’ll get a look at the most primary gauge of Japanese inflation, Tokyo Core CPI, later in the day. In the US, there are two major events on the schedule – US Unemployment Claims and Core Durable Goods Orders.

Japan’s trade deficit ballooned in March, jumping to -1.71 trillion yen, well above the estimate of -1.27 trillion. Besides weighing on the yen, the weak figure has raised speculation that the Bank of Japan may have to step in with further easing, as the economy has softened. Consumer consumption could drop as the recent sales tax hike weighs on consumers, and the BOJ could be forced into action as early as June or July. As well, China has been experiencing a slowdown, which bodes poorly for Japanese exports.

US Existing Home Sales edged lower in March, dropping to 4.59 million, down from 4.60 million a month earlier. However, it did beat the estimate of 4.57 million, marking the first time that the indicator has beaten the forecast since August. There was also good news form the manufacturing sector, as the Richmond Manufacturing Index jumped to 7 points, crushing the estimate of 0 points.

The markets haven’t reacted to events in Ukraine so far, but that could change if the violence in the east of the country worsens. Russian President Vladimir Putin has threatened to act on his “right” to invade Ukraine, and has also given the country an ultimatum regarding its gas debt. The gas supply from Russia to western Europe is in danger, and if the situation spills out of control, we could see a sharp response from the markets. US Vice-President Joe Biden is in Kiev for a symbolic visit. The West doesn’t have many cards to play against Russia, so every move by Putin will be scrutinized and could impact on the markets.

USD/JPY for Thursday, April 24, 2014

USD/JPY April 24 at 11:50 GMT

USD/JPY 102.42 H: 102.55 L: 102.25

USD/JPY Technical

• USD/JPY is showing little movement in Thursday trade.
• The pair continues to test resistance at 102.53, which has seen action all week long. Will the dollar break above this line? There is stronger resistance at 103.07.
• 101.19 is providing strong support.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.97.
• Above: 102.53, 103.30, 104.17, 105.70 and 106.85.

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged in Thursday trading. This is consistent with the pair’s movement, which is showing very little movement. The ratio is made up of a substantial majority of long positions, indicating trader bias towards the dollar moving upwards.

It’s more of the same for the yen, as USD/JPY continues to trade in the mid-102 range. The pair is showing little change in the European session.

USD/JPY Fundamentals

• 12:30 US Core Durable Goods Orders. Estimate 0.6%.
• 12:30 US Durable Goods Orders. Estimate 2.1%.
• 12:30 US Unemployment Claims. Estimate 309K.
• 14:30 US Natural Gas Storage. Estimate 40B.
• 23:30 Japanese Tokyo Core CPI. Estimate 2.8%.
• 23:30 Japanese National Core CPI. Estimate 1.4%.

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.