USDJPY is currently moving up to the level of 118.475 and the market price is already above the MA indicator line, so the market is still expected will move up to level 118.636.
Date : 28th January 2016.
CURRENCY MOVERS OF 28th January 2016.
Main Macro Events This Week
FX News Today
FOMC obviously left the funds rate range unchanged at 0.25% to 0.50%. It downgraded the outlook on growth and inflation slightly, tacitly acknowledging the various risks that have cropped up since the last meeting. But the statement wasn’t necessarily as dovish as the markets had hoped. The statement did repeat that global economic and financial developments are being closely monitored. The labor market continues to improve though net exports and inventory investment slowed. Of note, the Fed dropped the phrase that it is “reasonably confident” that inflation will reach the 2% target over the medium term. And it left out the balance of risks. The tone of the statement did not take a March hike off the table (that wasn’t really going to be the case) and it gives policymakers leeway to hike again in March. The vote was a unanimous 10-0.
Reserve Bank of New Zealand held rates at 2.50%, matching widespread expectations. However, they took a dovish tact, saying “Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range.” The evolution of the economic data is key, with the bank concluding “We will continue to watch closely the emerging flow of economic data.” Recall that in December, when the rate was cut 25 bps, Wheeler was more balanced, saying the bank’s inflation objective could accomplished at the current (2.50% ) rate setting, while also assuring the bank will reduce rates further if needed. As for the New Zealand dollar, he opines that “A further depreciation in the exchange rate is appropriate given the ongoing weakness in export prices.”
Possible Russian coordination with OPEC was discussed at a meeting with Russian oil companies, according to a Reuters report citing the Russian Energy Ministry, which was related to unfavorable oil prices. There were similar noises yesterday about Iraq and Russia, but this seems to be adding amplitude to the oil rebound now and helping putting a bid in equities and dollar-yen.
Main Macro Events Today
German Prel Jan HICP is seen rising to 0.4% y/y from 0.2% y/y, mainly due to base effects. This is likely to be mirrored by a similar rise to 0.4% y/y in the overall Eurozone number tomorrow. Still very low levels and far below the ECB’s definition of price stability.
EMU ESI: We had been looking for a modest decline in the European Commission’s ESI Economic Sentiment reading for the Eurozone to 106.6 (med 106.5) from 106.8, but after the weaker than expected Ifo earlier in the week and the weak Italian business confidence numbers yesterday the risk clearly is to the downside.
UK Domestic Product: the UK GDP numbers are out today and are expected to come in at 0.5% (previous 0.4%) QoQ and 1.9% (previous 2.1%) YoY.
US Initial Jobless Claims: are expected to be 280k in the week-ended January 23. Continuing claims are expected to fall to 2,195k for the week-ended January 16.
The outflow of funds from China and into safe haven currencies like the JPY has helped to strengthen the Japanese Yen in recent weeks. However, JPY traders may now be beginning to shift attention to market speculation that the Bank of Japan may be potentially seeking further stimulus measures that may add some weakness to the JPY.
Technically, a fibonacci retracement (December High 123.55 – January 20th low 115.90) trade could be in play for projected targets at 119.70 and 120.70. My strategy for short term traders is as long as price can stay above the 118.00 support line to hold long positions for the above fibonacci retracement targets 119.70 (Target 1) and 120.70 (Target 2).
Please note that times displayed based on local time zone and are from time of writing this report.
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USDJPY - 02.03.2016
Technically, USDJPY next immediate resistance above at 114.48, 115.98 and 116 levels. Downside support at 114 and 113.10 levels.
Trend overall looking slightly bullish.
The Japanese yen slumped on prospects for delay in Japan's sales tax hike and increasing speculation that the Fed could hike interest rates in near term. The greenback rose to an high of 111.44 and was trading 0.8 percent higher at 111.16. The resistance is around 111.50 and break above will take the pair till 112/112.80. On the lower side major support is around 110.40 and any break below will drag the pair till 110/109.65/109. The major should close below 108 for further weakness.
Last edited by Tom; 05-31-2016 at 04:39 PM.
The Japanese yen edged up to 111.02, having touched a high of 110.79 earlier in the session, however, still within the sight of 1-month low of 111.44 . The greenback was on track to post its best month in 1-1/2-years, having gained around 4.5 percent since the start of May. The major touched an early high of 111.35, before declining to its current levels. The resistance is around 111.50 and break above will take the pair till 112/112.80. On the lower side major support is around 110.40 and any break below will drag the pair till 110/109.65/109. The pair should close below 108 for further weakness.
The Japanese yen advanced against the dollar, after Japanese Prime Minister Shinzo Abe told lawmakers that he had decided to delay a scheduled sales tax hike by 2-1/2 years. The yen rose 1.2 percent to 109.30 yen, off a -month high of 111.45 struck on Monday. The greenback continues to decline, hovering towards session’s low of 109.22. The pair faces resistance around 110.50 (55 day EMA) and break above will take the pair till 111.50/112/112.80. On the lower side major support is around 109 (21 day MA) and any break below will drag the pair till 108/107.40.
The Japanese yen advanced against the greenback, as investors were uncertain over whether the U.S. Federal Reserve will raise interest rates in June or July. The greenback slumped as low as 108.83, pulling further away from a high of 111.44 touched on Monday. The major trades 0.5 percent lower at 108.98, hovering towards sessions low. The pair faces resistance around 109.80 (10 day EMA) and break above will take the pair till 110.50/111/111.45. On the lower side any break below 109 will drag the pair till 108/107.40.