USD/JPY – Little Movement as Markets Eye US Jobless Claims

USD/JPY is stable on Wednesday, as USD/JPY is trading in the mid-120 range. In the US, today’s highlight is Unemployment Claims. The key indicator is usually released each Thursday, but has been brought forward due to the Christmas holiday. The markets are not expecting much change from the previous release, with the estimate standing at 291 thousand. Over in Japan, the BOJ will release the minutes of last week’s policy meeting as well as the Services Producer Price Index, which measures corporate inflation.

In the US, there were a host of key events on Tuesday, with mixed results. GDP was red-hot in Q3, jumping 5.0%, ahead of the estimate of 4.6%. This marked the indicator’s strongest gain since the third quarter of 2003. The US economy is expected to continue to surge in 2015, driven by increased consumer spending and lower oil prices. The news was not as positive from Core Durable Goods Orders, which posted a decline of 0.4%, its fourth decline in five readings. The reading was well off the estimate of 1.1%. Durable Goods Orders looked even worse, with a reading of -0.7%. This surprised the markets which had anticipated a strong gain of 3.0%.

Elsewhere in the US, housing data continues to weaken as New Home Sales slipped to 438 thousand, its poorest showing since July and well short of the forecast of 461 thousand. UoM Consumer Sentiment continues to rise, hitting 93.6 points in December. This marked its highest level since February 2007, as the US consumer remains very optimistic about the economy as we move into 2015.

Japanese Prime Minister was re-elected by parliament on Wednesday and can now get back to the tough task of tackling the sluggish Japanese economy. Abe billed the election as a mandate on his “Abenomics” platform, which has included radical monetary easing and more government spending. The government’s economic platform has eliminated deflation, but the yen has plummeted as it trades around the 120 level. The weak yen has curtailed domestic demand, which has also been hurt by a sales tax hike which was introduced earlier in the year.

USD/JPY for Wednesday, December 24, 2014

USD/JPY December 24 at 12:20 GMT

USD/JPY 120.44 H: 120.71 L: 120.28

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
117.94 118.69 119.83 120.63 121.39 122.18

 

  • USD/JPY edged lower in the  session, breaking below support at 120.63. The pair is unchanged in European trading.
  • 120.63 continues to see action. It has reverted to a resistance role and is a weak line. 121.39 is stronger.
  • 119.83 is an immediate support level. 118.69 is next.
  • Current range: 119.83 to 120.63

Further levels in both directions:

  • Below: 119.83, 118.69, 117.94 and 116.69
  • Above: 120.63, 121.39, 122.18, 124.16 and 125.72

 

OANDA’s Open Positions Ratio

USD/JPY ratio is almost on Wednesday. This is consistent with the limited movement we’re seeing from the pair. The ratio has a majority of long positions, indicative of trader bias towards the dollar breaking above range and posting gains.

USD/JPY Fundamentals

  • 13:30 US Unemployment Claims. Estimate 291K.
  • 15:30 US Crude Oil Inventories. Estimate -2.4M.
  • 17:00 US Natural Gas Storage. Estimate -81B.
  • 23:50 BOJ Monetary Policy Meeting Minutes.
  • 23:50 Japanese Services Producer Price Index. Estimate 3.5%.

*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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.