USD/JPY – Little Movement Ahead of Key US Data

USD/JPY continues to show little activity this week. The pair is trading above the 102 line in Tuesday’s European session. Today’s sole release out of Japan is the Corporate Services Price Index, which has been posting respectable gains of late. There are two major releases out of the US, CB Consumer Confidence and New Home Sales.

Last week’s FOMC meeting, the first with Janet Yellen as Fed chair, was dramatic. The decision to trim QE by another $10 billion was widely expected, but her comments at the follow-up press conference gave the dollar a big boost against its major rivals. Yellen said that the Fed was on track to wind up QE in the fall, and could start to raise interest rates six months later. This is a more aggressive approach towards higher rates than the markets had expected, and the dollar responded by posting strong gains against the yen.

World markets have until now managed to avoid much fallout from the Ukrainian crisis, although the situation remains very tense. Western countries are scrambling to respond to Russia’s lightning takeover of the Ukrainian region. The G-7 is holding an emergency meeting in the Hague, and it seems likely that more sanctions will be leveled against Russia. Meanwhile, Ukraine says it has ordered its troops in Crimea to withdraw to the mainland, which marks a tacit recognition of the Russian annexation of Crimea. The situation in Ukraine is the most severe crisis in East-West relations since the Cold War ended, and we’re likely to see further developments which could affect the markets.

USD/JPY for Tuesday, March 25, 2014

USD/JPY March 25 at 12:30 GMT

USD/JPY 102.33 H: 102.36 L: 102.10

USD/JPY Technical

• The dollar is listless in Tuesday trading.
• 102.53 is a weak resistance line and  could be tested during the day. This is followed by strong resistance at 103.30.
• 101.19 is providing support. The next support line is the key level of 100.00, which has held firm since last November.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.65
• Above: 102.53, 103.30, 104.17, 105.70, 106.85

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged on Tuesday, continuing the pattern we saw at the start of the week. This is consistent with the pair’s lack of movement. Long positions make up a majority of the open positions in the ratio, indicating trader bias towards the dollar moving higher.

USD/JPY continues to have an uneventful week. This could change during the North American session, as the US releases key housing and consumer confidence data.

USD/JPY Fundamentals

• 13:00 US S&P/CS Composite-20 HPI. Estimate 13.3%.
• 13:00 US HPI. Estimate 0.7%.
• 14:00 US CB Consumer Confidence. Estimate 78.7 points.
• 14:00 US New Home Sales. Estimate 447K.
• 14:00 US Richmond Manufacturing Index. Estimate -1 point.
• 23:00 US FOMC Member Charles Plosser Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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