USD/JPY is stable on Tuesday, as the pair trades just shy of the 108 line in the European session. On the release front, Japanese Retail Sales surprised with a strong gain of 2.6%. Later in the day, we’ll get a look at Japanese Preliminary Industrial Production. After a decline in August, the markets are expecting a gain of 2.6% in the upcoming release. In the US, Core Durable Goods Orders looked weak, posting a decline of 0.2%. We’ll get a look at CB Consumer Confidence later in the day.
Japanese Retail Sales was unexpectedly strong in September, climbing 2.3%, its strongest gain since March and well above the estimate of 0.9%. There has been concern about consumer spending in Japan after the sales tax was raised in April from 5% to 8%. The government plans to increase the tax to 10%, but is wary about hurting the economy, which has been marked by modest growth.
In the US, durable goods looked dismal. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was a second straight decline, and missed the estimate of 0.4%. Later in the day, the US releases CB Consumer Confidence, with the markets anticipating a strong September reading.
The Federal Reserve will be at center stage on Wednesday, as a two-day meeting wraps up with the release of a policy statement. The Fed is expected to wind up QE, and if policymakers delay this move, the dollar will likely take a hit against its major rivals. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. Traders should treat this release as a market-mover which could have a significant impact on the direction of USD/JPY.
USD/JPY for Tuesday, October 28, 2014
USD/JPY October 28 at 13:50 GMT
USD/JPY 107.90 H: 108.17 L: 107.90
- USD/JPY was flat in the Asian session. The pair posted gains in the European session but has retracted.
- 107.68 continues to provide weak support. 106.85 is stronger.
- 108.58 is the next resistance line.
- Current range: 107.68 to 108.58
Further levels in both directions:
- Below: 107.68, 106.85, 105.44, 104.68 and 103.19
- Above: 108.58, 109.82, 110.68 and 112.24
OANDA’s Open Positions Ratio
USD/JPY ratio is pointing to gains in long positions on Tuesday. This is consistent with the pair’s movement, as the dollar has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards the dollar breaking out of range and moving higher.
- 12:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.2%.
- 12:30 US Durable Goods Orders. Estimate +0.4%. Actual -1.3%.
- 13:00 S&P/CS Composite-20 HPI. Estimate 5.7%.
- 14:00 US CB Consumer Confidence. Estimate 87.4 points.
- 14:00 US Richmond Manufacturing Index. Estimate 11 points.
- 23:50 Japanese Retail Sales. Estimate 0.9%. Actual 2.3%.
*Key releases are highlighted in bold
*All release times are GMT