USD/JPY -Struggling Yen Flirting With 119

USD/JPY has posted small gains on Monday, as the pair trades slightly under the 119 line in the North American session. On the release front, today’s highlight is Japanese Current Account. In the US, the only data release is the Labor Conditions Market Index. As well, FOMC member Dennis Lockhart will deliver a speech in Atlanta.

US releases wrapped up the week in fine fashion, as employment data shined. Nonfarm Employment Change, one of the most important indicators, posted a gain of 252 thousand, easily beating the estimate of 241 thousand. The unemployment rate fell to 5.6%, edging below the forecast of 5.7%. Meanwhile, Average Earnings dropped 0.2%, its first decline since July 2013. A lack of wage pressure means that the Fed may be able to postpone a rate hike until the second half of 2015.

The Federal Reserve released the minutes of its previous meeting on Wednesday, with no surprises for the markets. There had been plenty of speculation that the insertion of the word “patience” in the previous policy statement signaled a more aggressive monetary stance. However, the minutes stated that Fed members remained of the view that Fed policy had not changed, and that a rate hike was unlikely before April. 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 Monday, January 12, 2015

USD/JPY January 12 at 13:50 GMT

USD/JPY 118.86 H: 119.31 L: 118.10

USD/JPY Technical

• USD/JPY was uneventful in the Asian session. The pair posted strong gains in the European session.
• 118.69 is a weak support line. 117.94 is stronger.
• 119.83 is a strong resistance 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 Monday. 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

• 15:00 US Labor Market Conditions Index.
• 17:40 US FOMC Member Dennis Lockhart Speaks.
• 23:50 Japanese Current Account. Estimate 0.69T.
• 23:50 Japanese Bank Lending.

*Key releases are highlighted in bold

*All release times are GMT

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