USD/JPY – Dollar Above 106 Yen, US Building Permits Matches Forecast

The Japanese yen is showing limited change on Tuesday, after posting considerable losses in the Monday session. In the North American session, the yen is trading at 106.34. There are no Japanese events on Tuesday. Over in the US, Building Permits matched the forecast of 1.15 million, while Housing Starts came in at 1.19 million, beating the forecast of 1.17 million.

The yen suffered a dismal week, plunging close to 600 points before reversing directions and dropping 400 points on the week. The yen dropped to levels not since the Brexit vote in late June, as Prime Minister Shinzo Abe’s election victory last week has paved the path for further monetary moves as part of the government’s economic platform. The government is busy preparing a fiscal stimulus package and the markets will be keeping an eye on the Bank of Japan, which meets in late July and could adopt further easing measures. The yen had gained ground after the Brexit vote, even breaking below the 100-level, as the political and economic turmoil bolstered the safe-haven yen.

US consumer indicators were on center stage on Friday, and the numbers were a mixed bag. Consumer inflation reports posted small gains of 0.2%, as inflation levels remain soft. There was better news on the consumer spending front, as Core Retail Sales posted a strong gain of 0.7%, beating the estimate. The UoM Consumer Sentiment report dipped below the 90-point level for the first time in three months, missing expectations. The Federal Reserve is unlikely to raise rates before September at the earliest, unless there is some strong improvement in economic data, particularly inflation and wage growth, which remain at low levels.

USD/JPY Fundamentals

Tuesday (July 19)

  • 8:30 US Building Permits. Estimate 1.15M. Actual 1.15M
  • 8:30 US Housing Starts. Estimate 1.17M. Actual 1.19M

*Key events are in bold

*All release times are EDT

USD/JPY for Tuesday, July 19, 2016

USD/JPY July 19 at 10:00 EDT

Open: 106.18 High: 106.53  Low: 105.62 Close: 106.40

USD/JPY Technical

S3 S2 S1 R1 R2 R3
103.73 104.99 105.87 106.81 107.65 108.61
  • USD/JPY posted slight losses in the Asian session. The pair showed limited movement in the European session and has moved higher in North American trade
  • 106.81 is a weak resistance line
  • 105.87 is providing support
  • Current range: 105.87 to 106.81

Further levels in both directions:

  • Below: 105.87, 104.99, 103.73 and 102.36
  •  Above: 106.81, 107.65 and 108.61

OANDA’s Open Positions Ratio

The USD/JPY ratio is almost unchanged, consistent with the lack of movement from USD/JPY. Currently, long positions retain a majority (58%), indicative of trader bias towards USD/JPY continuing to move to higher ground.

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.