USD/JPY – Steady as Unemployment Claims Within Expectations

USD/JPY has posted small gains on Thursday, as the pair trades in the mid-119 range early in the North American session. On the release front, US Unemployment Claims dropped to 294 thousand, slightly above the estimate. There are no Japanese indicators on Thursday.

US employment data will be in the spotlight on Thursday and Friday. Earlier on Thursday, Unemployment Claims came in at 294 thousand, down from 298 a week earlier. This figure was within expectations, as the estimate stood at 291 thousand. On Friday, we’ll get a look at the all-important Nonfarm Payrolls as well as the unemployment rate.

The Federal Reserve released the minutes of its previous meeting on Wednesday, with no surprises to shake up the markets. There had been a lot of speculation that the insertion of the word “patience” in the December policy statement signaled a more aggressive monetary stance on the part of the Fed. However, the minutes stated that Fed members remained of the view that monetary policy had not changed, and that a rate hike would not occur before April. The markets are expecting a rate hike sometimes in 2015, but it’s hard to be any more precise. Although economic growth continues to improve, inflation remains at very low levels, which means that the economy is in no danger of overheating, so there is no immediate need for a rate increase.

USD/JPY for Thursday, January 8, 2015

USD/JPY January 8 at 14:30 GMT

USD/JPY 119.57 H: 119.96 L: 119.16

USD/JPY Technical

• USD/JPY posted gains in the Asian session, testing resistance at 119.83. The pair edged lower in the European session and is unchanged early in North American trade.
• 118.69 is providing strong support.
• On the upside, 119.83 has weakened. Will the pair break through in the North American session? 120.63 is a stronger line.
• Current range: 118.69 to 119.83

Further levels in both directions:

• Below: 118.69, 117.94, 116.69 and 115.56
• Above: 119.83, 120.63, 121.39, 122.18 and 124.16

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Thursday, continuing the direction seen a day earlier. 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 continuing to move upwards.

USD/JPY Fundamentals

• 12:30 US Challenger Job Cuts. Actual 6.6%.
• 13:30 US Unemployment Claims. Estimate 291K. Actual 294K.
• 15:30 US Natural Gas Storage. Estimate -120B.
• 20:00 US Consumer Credit. Estimate 15.1B.

*Key releases are highlighted in bold

*All release times are GMT

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