By FXEmpire.com
Introduction: In the USD/JPY trade, trying to pick tops or bottoms during that time would have been difficult. However, with the bull trend so dominant, the far easier and smarter trade was to look for technical opportunities to go with the fundamental theme and trade with the market trend rather than to trying to fade it.
Against the Japanese yen, whose central bank held rates steady at zero, the dollar appreciated 19% from its lowest to highest levels. USD/JPY was in a very strong uptrend throughout the year, but even so, there were plenty of retraces along the way. These pullbacks were perfect opportunities for traders to combine technicals with fundamentals to enter the trade at an opportune moment.
- The interest rate differential between the Bank of Japan(BoJ) and the Federal Reserve
- Japanese government intervention to maintain their currency sends USD/JPY lower
Weekly Analysis and Recommendation:
The USD/JPY remained range bound this week in the low 78 price level. The pair were mostly respondent to the moves and the strengths and weakness of the USD. This was a week about news flow and central banks with little response over eco data. As shown on the chart below, the JPY ended at 78.47
|
Date |
Open |
High |
Low |
Change % |
|
|
Aug 03, 2012 |
78.47 |
78.23 |
78.77 |
78.07 |
0.31% |
|
Aug 02, 2012 |
78.23 |
78.38 |
78.53 |
78.12 |
-0.20% |
|
Aug 01, 2012 |
78.38 |
78.13 |
78.50 |
77.92 |
0.32% |
|
Jul 31, 2012 |
78.13 |
78.13 |
78.30 |
78.04 |
0.00% |
|
Jul 30, 2012 |
78.13 |
78.50 |
78.53 |
78.11 |
-0.47% |
The Asian currency outlook is strongly shaped by the value of both the JPY and the Chinese renminbi (CNY). It is worth noting that, despite the still large foreign capital inflows eyeing the Chinese economy and its securities markets, the central bank with its massive international reserves in excess of US$3 trillion can dictate the USDCNY rate. In fact, the CNY has been depreciating versus the USD since early May, in stark contrast to the appreciating tone enjoyed by the JPY. The degree of economic deceleration in China is a key factor swaying financial market sentiment the world over. The authorities have not hesitated to change the course of the CNY to inject currency linked export competitiveness. With each comment and statement from the Chinese it becomes more evident that we might see some monetary easing in the near future and which China being the 3rd largest economy, this would help stimulate global economies and would benefit its surrounding neighbors as well
The Bank of Japan meeting this week, is not supposed to yield any new results or actions
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthlyanalysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events for the week of Aug 30 – Jul 3 actual v. forecast for Yen, the Aussie, the Kiwi and USD
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul 31 |
NZD |
NBNZ Business Confidence |
15.1 |
12.6 |
|
|
AUD |
Building Approvals m/m |
-2.5% |
-14.6% |
27.0% |
|
|
USD |
CB Consumer Confidence |
65.9 |
61.5 |
62.7 |
|
|
Aug 1 |
USD |
ADP Non-Farm Employment Change |
163K |
121K |
172K |
|
USD |
ISM Manufacturing PMI |
49.8 |
50.3 |
49.7 |
|
|
Aug 2 |
AUD |
Retail Sales m/m |
1.0% |
0.6% |
0.8% |
|
AUD |
Trade Balance |
0.01B |
-0.36B |
-0.31B |
|
|
USD |
Unemployment Claims |
365K |
375K |
357K |
|
|
Aug 3 |
USD |
Non-Farm Employment Change |
163K |
101K |
64K |
|
USD |
Unemployment Rate |
8.3% |
8.2% |
8.2% |
|
|
USD |
ISM Non-Manufacturing PMI |
52.6 |
52.1 |
52.1 |
Historical: From 2010 to present
Highest: 94.99 on May 05, 2010
Average: 82.77 over this period
Lowest: 75.58 on Oct 31, 2011
Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Aug 6 |
1:30 |
AUD |
ANZ Job Advertisements m/m |
-1.2% |
|
|
22:45 |
NZD |
Labor Cost Index q/q |
0.5% |
||
|
Aug 7 |
4:30 |
AUD |
Cash Rate |
3.50% |
3.50% |
|
4:30 |
AUD |
RBA Rate Statement |
|||
|
23:50 |
JPY |
Current Account |
0.28T |
||
|
Aug 8 |
1:30 |
AUD |
Home Loans m/m |
-1.2% |
|
|
12:30 |
USD |
Prelim Nonfarm Productivity q/q |
-0.9% |
||
|
12:30 |
USD |
Prelim Unit Labor Costs q/q |
1.3% |
||
|
14:30 |
USD |
Crude Oil Inventories |
|||
|
22:45 |
NZD |
Employment Change q/q |
0.4% |
||
|
22:45 |
NZD |
Unemployment Rate |
6.7% |
||
|
23:50 |
JPY |
Core Machinery Orders m/m |
-14.8% |
||
|
Aug 9 |
1:30 |
AUD |
Employment Change |
-27.0K |
|
|
1:30 |
AUD |
Unemployment Rate |
5.2% |
||
|
12:30 |
USD |
Trade Balance |
-48.7B |
||
|
12:30 |
USD |
Unemployment Claims |
|||
|
Aug 10 |
1:30 |
AUD |
RBA Monetary Policy Statement |
||
|
12:30 |
USD |
Import Prices m/m |
-2.7% |
||
|
18:00 |
USD |
Federal Budget Balance |
-59.7B |
Upcoming Government Bond Auctions
Date Time Country
Aug 06 09:10 Norway
Aug 07 00:30 Japan
Aug 07 09:15 Austria
Aug 07 14:30 UK
Aug 07 17:00 US
Aug 08 09:30 Germany
Aug 08 10:00 Norway
Aug 08 15:30 Italy
Aug 08 17:00 US
Aug 09 15:30 Italy
Aug 09 17:00 US
Aug 10 10:00 Belgium
Aug 13 09:10 Italy
Aug 13 09:10 Norway
Aug 13 09:30 Germany
Aug 14 09:10 Greece
Aug 14 09:10 Italy
Aug 14 09:30 Belgium
Aug 14 14:30 UK
Aug 15 09:10 Sweden
Aug 16 09:30 UK
Aug 16 15:00 US
Click here for further USD/JPY Forecast.
Originally posted here
