USD/JPY – Yen Improves, Pushes Below 119

USD/JPY has moved lower on Tuesday, as the yen continues to post gains this week. In the European session, the pair is trading in the high-118 range. On the release front, the Japanese 10-year bond auction dipped, with a yield of only 0.30%. This was the indicator’s third straight drop. In the US, today’s highlight is the ISM Non-Manufacturing PMI, with the markets expecting a weaker reading for December. The estimate stands at 58.2 points. With only a few minor events coming out of Japan this week, US events will have a heightened impact on the direction of USD/JPY.

On Friday, US ISM Manufacturing PMI disappointed, falling to 55.5 points. This missed the forecast of 57.6 points and marked a 6-month low for the index. Still, market sentiment remains positive regarding the US economy and the US dollar continues to look sharp against its major rivals. The yen has started off the week with gains against the US dollar, but USD/JPY remains at multi-year highs and we could see the greenback recover if US key releases have a good week.

USD/JPY for Tuesday, January 6, 2015

USD/JPY January 6 at 10:20 GMT

USD/JPY 118.84 H: 119.51 L: 118.66

USD/JPY Technical

• USD/JPY posted modest losses in the Asian session, testing support at 118.69. The pair has edged lower in European trade.
• On the downside, 118.69 is under strong pressure. Will the pair break below this level during the day?  117.94 is stronger.
• 119.83 is an immediate 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 Tuesday. This is not consistent with the pair’s movement, as the yen has posted slight gains. The ratio has a majority of long positions, indicative of trader bias towards the dollar reversing its recent losses and moving to higher ground.

USD/JPY Fundamentals

• 3:45 Japanese 10-year Bond Auction. Actual 0.30%.
• 14:45 US Final Services PMI. Estimate 53.8 points.
• 15:00 US ISM Non-Manufacturing PMI. Estimate 58.2 points.
• 15:00 US Factory Orders. Estimate -0.3%

*Key releases are highlighted in bold

*All release times are GMT

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