USDJPY Technical Analysis 2015, 11.01 - 18.01: Correction by Breakdown on Open Bar

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newdigital, 2015.01.10 12:08

Forex Weekly Outlook January 12-16

Inflation data in the UK and the US, US retail sales, PPI and employment data, Philly Fed Manufacturing Index and Consumer sentiment are the main events on Forex calendar. Here is an outlook on the highlights of this week.

Last week, NFP report was better than expected showing a job gain of 252K in December. The solid increase indicates further strengthening in the US economy. The Unemployment rate fell 0.2% to a 6-1/2 year low of 5.6%, beating forecasts for a 5.7% reading. However, average hourly earnings which showed a 6 cents increase in November, dipped 5 cents in December. Long-term unemployed continued to shrink in December, but the labor force participation rate fell to 62.7% from 62.9% in November. Will wage growth in the US labor market continue improve in the coming months?

1. UK inflation data: Tuesday, 9:30. UK consumer prices plunged to a twelve year low of 1% in November, reaching half the BoE’s inflation target. The reading was worse than expected caused by a sharp and continuous decline in oil prices. However the low oil prices were positive for consumers, boosting spending and supporting UK growth. The Bank’s monetary policy committee said in its November inflation is likely to fall below 1% in early 2015. UK consumer prices are expected to increase by 0.7%.
2. US retail sales: Wednesday, 13:30. U.S. consumer spending edged up in November amid the holiday shopping season, boosted further by lower gasoline prices. Meanwhile, retail sales excluding automobiles, gasoline, building materials and food services rose 0.6% after an unrevised 0.5% gain in October. Economists expected core sales to rise a mere 0.1% last month. The shopping spree accelerated growth in the fourth quarter. Retail sales are expected to gain 0.2%, while Core sales are predicted to increase by 0.1%.
3. Australian employment data: Thursday, 0:30. Australia’s unemployment edged up to 6.3% in November as more people looked for jobs. Economic activity weakened by sluggish Chinese demand. However the Australian job market added 42,700 positions in November, much better than the 13,700 increase posted in the prior month and the 15,000 addition forecasted by analysts. This rise suggests improvement in the Australian labor market. Policymakers are preparing for further easing measures in case the weakness in the job market and domestic demand continues. Economists expect job growth to increase by 5,300 while the Unemployment rate is expected to remain unchanged at 6.3%.
4. US PPI: Thursday, 13:30. Producer Price Index fell 0.2% in November prompted by lower oil prices, following a 0.2% gain in the prior month. Analysts expected a smaller decline of 0.1%. On an unadjusted basis, producer prices increased 1.4% for the 12 months ended November, the slowest 12-month increase since February 2014. Core producer prices, excluding food and energy remained unchanged after a 0.4% rise in November. Producer Price Index is expected to drop 0.3% this time.
5. US Unemployment claims: Thursday, 13:30. The number initial claims for unemployment benefits declined last week by 4,000 to 294,000 amid a sharp decrease in dismissals. Strong consumer spending had a positive effect on the labor market, despite a weakening in global economy. The four-week moving average a more solid measure of labor market trends, remained below the 300,000 mark for the 17th straight week. Jobless claims is expected to reach 299,000 this week.
6. US Philly Fed Manufacturing Index: Thursday, 15:00. Factory activity in the U.S. mid-Atlantic region plunged to 24.5 in December from 40.8 in the previous month, indicating slower activity. New orders fell to 15.7 from 35.7. Employment conditions weakened to 7.2, down from 22.4 marking the lowest level since April. Philly Fed Manufacturing Index is predicted to reach 20.3 this time.
7. US Inflation data: Friday, 13:30. U.S. consumer prices registered their biggest decline in nearly six years in November amid a slide in gasoline prices. Consumer Price Index plunged 0.3%, following flat reading in October. On a yearly base CPI increased 1.3% the smallest gain in nine months, after posting a 1.7% rise in October. While inflation declines, the US job market continues to strengthen including a big gain in weekly earnings. Meanwhile, Core CPI excluding food and energy prices gained 0.1% following a 0.2% rise in the previous month. The rise suggests oil prices are the main cause for the sharp declines. Analysts expect consumer prices to dip 0.3% while Core prices are expected to increase 0.1%.
8. US Prelim UoM Consumer Sentiment: Friday, 14:55. U.S. consumer sentiment surged in December to a near eight-year high amid improved earnings and better job prospects. Consumer sentiment edged up to 93.8 from 88.8 in November. The survey’s one-year inflation expectation rose to 2.9 percent from 2.8 percent, while its five-year inflation outlook also rose to 2.9 percent from 2.6 percent last month. Economists expect consumer sentiment to rise further to 94.2 this time.

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newdigital, 2015.01.11 13:53

USDJPY Fundamentals (based on dailyfx article)

Fundamental Forecast for Japanese Yen: Bullish

• Japanese Yen could continue higher versus the US Dollar
• Caution urged as USDJPY tests key trendline support

The Japanese Yen snapped a multi-week losing streak for the US Dollar as it rallied noticeably off of recent lows. A slowdown in global economic event risk may produce smaller moves ahead, but we’re watching key levels on the USDJPY as the risk of a larger JPY correction grows.

Traders sent the Japanese currency near fresh multi-year lows into the final trading days of 2014, but an important bounce in the New Year suggests conviction in the JPY-short trade (USDJPY-long) has faded. Price action seems remarkably similar to what happened exactly 12 months ago: the USDJPY topped on the first trading day of 2014 on its way to a four percent correction. A comparable move would send the Dollar to ¥115 before a resumption in the overall uptrend.

A relatively quiet week in both Japan and the US nonetheless suggests traders may wait until the following week’s highly-anticipated Bank of Japan policy meeting to force big Yen moves. Yet traders should keep a close eye on USDJPY price action as it trades at potentially significant price support, and a break below month-to-date lows near ¥118 could force a larger move towards December’s trough at ¥115.60.

A strong correlation between the Japanese Yen and the Nikkei 225/US S&P 500 tells us the next big USDJPY move could coincide with equity market turmoil. An important drop in the S&P Volatility Index (VIX) shows that few fear any such tumbles, but market conditions can and do change quite quickly.

Overall outlook for the Dollar and Japanese Yen in 2015 make a USDJPY-long position one of our favorite trades of the year. Yet a year is a long stretch of time in trading markets, and prices do not move in straight lines. We are cautious on fresh USDJPY-long positions given clear risk of a larger short-term correction—particularly ahead of the Bank of Japan meeting on January 20.

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newdigital, 2015.01.11 15:08

USD/JPY Weekly Fundamental Analysis, January 12-16, 2015 – Forecast (based on fxempire article)

The USD/JPY ended the week at 118.47 falling 1.19 on Friday alone as the US dollar eased after the release of the jobs data.  The Japanese Yen snapped a multi-week losing streak for the US Dollar as it rallied noticeably off of recent lows. A slowdown in global economic event risk may produce smaller moves ahead, but we’re watching key levels on the USDJPY as the risk of a larger JPY correction grows.

Analysts also took that as a possible pointer to the Federal Reserve taking its time on raising interest rates this year, against some expectations prior to the report that an initial hike from the zero level could come as early as April.

In a reversal, the government now expects the economy to shrink around 0.5 percent in real terms for fiscal 2014, downgrading its July forecast of 1.2 percent growth, sources said Friday. The global plunge in oil prices could translate into annual economic gains of ¥7 trillion, Economic and Fiscal Policy Minister Akira Amari said Friday. “Oil prices are now less than half what they were at their peak. That stops money outflows.

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newdigital, 2015.01.11 15:10

USD/JPY weekly outlook: January 12 - 16 (based on investing article)

The dollar fell against the yen on Friday after the latest U.S. jobs report showed that average earnings fell last month, suggesting that the Federal Reserve could keep rates on hold for longer.

The U.S. economy added 252,000 jobs in December the Labor Department said, more than the 240,000 forecast by economists. The unemployment rate ticked down to a six-and-a-half year low 5.6% from 5.8% in November. Economists had forecast a decline to 5.7%.

However, the report also showed that average earnings fell by 0.2% in December, missing expectations for a 0.2% increase and were up by just 1.7% from a year earlier.

The drop in average earnings prompted investors to take profits in the dollar, as markets pushed back expectations for the first hike in U.S. interest rates to late-2015 from mid-2015 before the report.

Following an initial move higher the dollar fell against the yen, with USD/JPY down 0.99% to 118.46 late Friday. The pair ended the week down 1.6%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.39% to 92.18 late Friday, off the 12-year peaks of 92.76 reached in the previous session. The index still notched up a weekly gain, supported by weakness in the euro.

The euro ended the week at more than two-month lows against the yen, with EUR/JPY down 0.57% to 140.32 in late trade, the weakest since October 31.

In the euro zone, data on Friday showed that industrial output fell in both Germany and France in November, while German exports also fell. The weak data fuelled speculation that the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.

Earlier in the week, data showed that consumer prices in the euro area fell in December for the first time in more than five years, adding to pressure on the ECB to step up measures to avert the threat of deflation taking hold in the region.

The single currency was also pressured lower by uncertainty over Greece’s future in the euro zone if far-left anti-austerity party Syriza win elections due to be held later this month.

In the week ahead, the economic calendar is light, but markets will be looking ahead to Wednesday’s report on U.S. retail sales, as well as Friday’s data on consumer sentiment and factory output.

Monday, January 12

• In the U.S., Atlanta Federal Reserve President Dennis Lockhart is to speak.

Tuesday, January 13

• Japan is to produce data on the current account.

Wednesday, January 14

• The U.S. is to produce data on retail sales, in addition to reports on import prices and business inventories.

Thursday, January 15

• The U.S. is to publish the weekly report on initial jobless claims as well as data on producer prices and manufacturing activity in the Philadelphia region.

Friday, January 16

• Japan is to release data on tertiary industry activity.
• The U.S. is to round up the week with a report on industrial production and preliminary data on consumer sentiment.

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newdigital, 2015.01.12 09:45

USD/JPY Near 118 after U.S. Payrolls Disappoint (based on marketpulse article)

The dollar nursed losses early on Monday, having suffered a setback after an unexpected fall in U.S. wages tainted what was otherwise a robust report on the labor market.

Investors were quick to cut long dollar positions after wages posted their biggest decline in at least eight years in December, even as payrolls increased by a brisk 252,000.

The greenback dipped as far as 118.22 yen first thing on Monday, reaching a low last seen on Jan. 6. The euro edged up to $1.1857, pulling away from a nine-year trough of $1.1754 plumbed on Thursday.

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newdigital, 2015.01.13 06:22

USDJPY Threatens Opening Range- Sub 118 Targets In View (based on dailyfx article)

• USDJPY testing interim support 118.04/18 (near-term bullish invalidation)
• Resistance 119.85 & 120.66/81- bearish invalidation
• Weekly opening range to validate near-term scalp bias
• Support break targets MLP (blue) & 116.93
• Daily RSI Support & Resistance triggers pending
• Event Risk Ahead: US Retail Sales tomorrow & CPI, Industrial Production & University of Michigan on Friday

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newdigital, 2015.01.13 08:56

Japan Eco Watchers' Current Index Rises More Than Expected In December (based on rttnews article)

A measure of people's assessment of the Japanese economy improved in December after worsening in the previous two months, survey figures from the Cabinet Office showed Tuesday.

The current index of the economy watchers survey rose by 3.7 points to 45.2 in December from 41.5 in November. Economists had forecast the index to rise to 44.0.

A reading above 50 suggests optimism and a score below 50 indicates pessimism. The latest increase was the first in three months.

Meanwhile, the outlook index climbed to 46.7 in December from 44.0 in the prior month. It was the highest score since September, when it was at 48.7.

Marcel Thieliant, a Japan economist at Capital Economics noted that the strong rebound in the Economy Watchers Survey in December stands in stark contrast with other business surveys which mostly weakened last month.

The economist said he would place more weight on small business confidence and the PMIs, which on balance worsened at the end of last year and remain consistent with falling industrial output.

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newdigital, 2015.01.14 08:14

USD/JPY Lower (based on benzinga article)

The U.S. Dollar is trading lower against Japan's Yen in afternoon trading. Some market chatter is looking ahead to the Bank of Japan next week and is expecting the BOJ to cut Japan's core CPI forecast to 1.5 percent from 1.7 percent.

The USD/JPY is trading weak and for the most part is reacting to moves in the U.S stock market. The USD/JPY pair is trading at 117.96, down 0.37.

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Something Interesting in Financial Video January 2015

newdigital, 2015.01.14 08:10

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newdigital, 2015.01.14 18:05

USD/JPY Technical Analysis: Support Below 118.00 Pressured (based on dailyfx article)

The US Dollar is testing the bottom of now-familiar range support below the 118.00 figure against the Japanese Yen once again. Near-term support is at 117.91, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing falling channel support at 116.87. Alternatively, a reversal above channel top resistance at 119.16 opens the door for a test of the December 23 high at 120.82.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.

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Something Interesting in Financial Video January 2015

newdigital, 2015.01.15 10:51

Euro Range in Focus- USD/JPY Downside Targets Remain Favored

EUR/USD may continue to face range-bounce prices ahead of the European Central Bank (ECB) policy meeting as market participants look for a QE announcement.

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newdigital, 2015.01.15 20:51

USD/JPY Technical Analysis: Yen Touches 1-Month High (based on dailyfx article)

• USD/JPY Technical Strategy: Flat
• Support: 116.64, 115.48, 113.51
• Resistance: 117.91, 118.96, 120.82

The US Dollar edged lower for a fourth consecutive day against the Japanese Yen, dipping to the lowest level in a month. A daily close below falling channel floor support at 116.64 exposes the 38.2% Fibonacci retracement at 115.48. Alternatively, a reversal above the 23.6% Fib retracement at 117.91 opens the door for a test of channel top resistance at 118.96.

Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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newdigital, 2015.01.16 09:20

USD/JPY - Yen Posts Gains As U.S. Unemployment Claims Jumps (based on seekingalpha article)

The Japanese yen continues to move higher, as the pair trades in the high-116 range on Thursday. On the release front, Japanese Core Machinery Orders improved to 1.3%, but this was well below expectations. Later today, Japan will release Tertiary Industry Activity. The markets are expecting a gain of 0.3%. In the US, Unemployment Claims was unexpectedly weak, jumping to 316 thousand. PPI posted a decline of 0.3%, matching the forecast. The Empire State Manufacturing Index rose to 10.3 points and we’ll get a look at the Philly Fed Manufacturing Index later in the day.

US employment numbers slipped on Thursday, as Unemployment Claims surprised with a reading of 316 thousand. This was well above the estimate of 299 thousand and was the highest reading since June 2014. However, the first full week of the year often shows a spike in claims, since holiday workers are dismissed, resulting in a higher number of claims. Earlier in the week, JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be under the market microscope as the Fed mulls when to raise interest rates.

Earlier in the week, US retail sales caught the markets off guard with sharp declines in the December readings. Core Retail Sales came in at -1.0%, while Retail Sales followed suit with a loss of 0.9%. Both key indicators recorded their worst showings since May 2010. However, retail sales were solid in the past two months, so the numbers for Q4 will be in positive territory.

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newdigital, 2015.01.16 12:03

Trading the News: U.S. Consumer Price Index (CPI) (based on dailyfx article)

• U.S. Consumer Price Index (CPI) to Mark Slowest Pace of Growth Since 2009.
  
• Core Rate of Inflation to Hold at Annualized 1.7% for Second Month.
  

A marked slowdown in the U.S. Consumer Price Index (CPI) may trigger a short-term squeeze in EUR/USD should the development dampen the Federal Open Market Committee’s (FOMC) scope to normalize monetary policy sooner rather than later.

What’s Expected:



Despite expectations for a rate hike in mid-2015, the Fed may sound increasingly cautious and preserve its highly accommodative policy stance beyond schedule as the central bank struggles to achieve its mandate for price stability.

Nevertheless, improved business confidence paired with the pickup in economic activity may limit the downside risk for price growth, and the stickiness in core inflation may heighten the appeal of the greenback as a growing number of central bank officials show a greater willingness to normalize monetary in 2015.

How To Trade This Event Risk

Bearish USD Trade: U.S. CPI Slips to Annualized 0.7% or Lower

• Need to see green, five-minute candle following the release to consider a long trade on EURUSD
• If market reaction favors a bearish dollar trade, buy EURUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit; set reasonable limit

• Need red, five-minute candle to favor a short EURUSD trade
• Implement same setup as the bearish dollar trade, just in the opposite direction

• EUR/USD remains at risk for a further decline as long as the RSI pushes deeper into oversold territory.
• Interim Resistance: 1.1840-50 (50% expansion)
• Interim Support: 1.1500 pivot to 1.1565 (weekly low)

EURUSD M5: 13 pips price movement by USD - CPI news event:

The U.S. Consumer Price Index (CPI) slowed to an annualized rate of 1.3% from 1.7% in October on the back of falling energy prices, with the core rate of inflation narrowing to 1.7% from 1.8% during the same period. Indeed, subdued price pressures raise the risk of seeing the Fed further delay its first rate hike, but it seems as though the central bank will normalize monetary policy in 2015 as the committee anticipate the drop in oil prices to have an positive impact on the real economy. Despite the initial tick higher in EUR/USD, the dollar remained resilient against its European counterpart as the pair slipped below the 1.2400 handle during the North American trade to end the day at 1.2343.

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USDJPY, M5, 2015.01.16

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USDJPY M5: 44 pips price movement by USD - CPI news event