USD/JPY – Yen Improves Ahead of Key US Releases

The Japanese yen has shown some improvement in Thursday trading. USD/JPY has dropped below the 102 line in the European session. In economic news, the markets will have plenty of data to chew on later in the day. Over in the US, we’ll get a look at Core Durable Goods Orders and the all-important Unemployment Claims. As well, Fed Reserve chair Janet Yellen testifies before the Senate. Japan will release a host of events, highlighted by Tokyo Core CPI and Retail Sales.

A nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468 thousand, crushing the estimate of 406 thousand. It was the key indicator’s best showing since last June, and helped allay concerns about the health of the housing sector, following weak housing numbers last week. The markets will be looking for more good news on Thursday, as the US releases Core Durable Goods Orders and the all-important Unemployment Claims.

The markets are keeping a close eye on Capitol Hill, as Federal Reserve Chair Janet Yellen testifies before the Senate later on Thursday. Yellen is expected to reiterate that Fed will likely continue trimming QE, barring any downturns in the economy. Last week’s Federal Reserve minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. Previously, the Fed had said it would consider raising rates at the 6.5% threshold, but with unemployment falling faster than expected, Federal Reserve policymakers agreed that it would “soon be appropriate” to revise the Fed’s forward guidance regarding interest rate levels, and such a move could shake up the currency markets.

USD/JPY for Thursday, February 27, 2014

USD/JPY February 27 at 13:00 GMT

USD/JPY 102.11 H: 102.45 L: 101.73

USD/JPY Technical

• USD/JPY has posted losses in Thursday trading. The pair touched a low of 101.73 in the European session but has bounced back above the 102 line.
• 102.53 is the next resistance line. There is stronger resistance at 103.30.
• 101.19 is providing support. Next is the key level of 100.00, which has remained intact since 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 showing gains in long positions in Thursday trading. This is not consistent with what we are seeing from the pair, as the yen has posted modest gains. Long positions continue to comprise a solid majority in the USD/JPY ratio, indicating trader bias towards the dollar posting gains against the yen.

The yen has posted gains on Thursday and is back above the 102 line late in the European session.

USD/JPY Fundamentals

•  13:30 US Core Durable Goods Orders. Estimate -0.1%.
•  13:30 US Unemployment Claims. Estimate 333K.
•  13:30 US Durable Goods Orders. Estimate -0.7%.
• 15:00 Federal Reserve Chair Janet Yellen testifies before the Senate Banking Committee.
• 15:30 US Natural Gas Storage. Estimate -110B.
• 23:15 Japanese Manufacturing PMI.
• 23:30 Japanese Household Spending. Estimate 0.5%.
• 23:30 Japanese Tokyo Core CPI. Estimate 0.8%.
• 23:30 Japanese National Core CPI. Estimate 1.3%.
• 23:30 Japanese Unemployment Rate. Estimate 3.7%.
• 23:30 Japanese Preliminary Industrial Production. Estimate 3.1%.
• 23:30 Japanese Retail Sales. Estimate 3.9%.

*Key releases are highlighted in bold

*All release times are GMT

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