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 moved up all week, as risk aversion left the markets the JPY lost its momentum. After a generally sleepy week for Asia, things heat up a bit next week by way of potential global market ramifications. One is that there is the ever-present risk of rate cuts or cuts to the required reserve ratio in China given the lack of a formal schedule for such moves.
China’s Premiere Wen said this week that “growing room for monetary policy operations” gives his government room to step on the stimulus accelerator. Chinese funding markets agree, but they are not pricing interest rate cuts in the next two months (see chart), implying a bet that the first stimulus measures will be an easing of reserve ratio requirements — which Chinese officials tend to announce over weekends.
The dollar strengthened against the yen in Asian trade on Friday afternoon, boosted by US economic data that pointed to signs of recovery and dollar-buying among Japanese importers.
|
Date |
Open |
High |
Low |
Change % |
|
|
Aug 17, 2012 |
79.56 |
79.27 |
79.57 |
79.24 |
0.37% |
|
Aug 16, 2012 |
79.27 |
79.01 |
79.41 |
79.00 |
0.33% |
|
Aug 15, 2012 |
79.01 |
78.83 |
79.05 |
78.61 |
0.23% |
|
Aug 14, 2012 |
78.82 |
78.34 |
78.93 |
78.33 |
0.61% |
|
Aug 13, 2012 |
78.34 |
78.26 |
78.38 |
78.16 |
0.11% |
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 August 13-17, 2012 actual v. forecast for Yen, the Aussie, the Kiwi and USD
|
Date |
Time |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Aug 13 |
22:45 |
NZD |
Core Retail Sales q/q |
0.9% |
1.0% |
-1.4% |
|
Aug 14 |
12:30 |
USD |
Core Retail Sales m/m |
0.8% |
0.4% |
-0.8% |
|
12:30 |
USD |
PPI m/m |
0.3% |
0.3% |
0.1% |
|
|
12:30 |
USD |
Retail Sales m/m |
0.8% |
0.3% |
-0.7% |
|
|
Aug 15 |
12:30 |
USD |
Core CPI m/m |
0.1% |
0.2% |
0.2% |
|
Aug 16 |
12:30 |
USD |
Building Permits |
0.81M |
0.77M |
0.76M |
|
12:30 |
USD |
Unemployment Claims |
366K |
365K |
364K |
|
|
14:00 |
USD |
Philly Fed Manufacturing Index |
-7.1 |
-4.7 |
-12.9 |
|
|
22:45 |
NZD |
PPI Input q/q |
0.6% |
-0.2% |
0.3% |
|
|
Aug 17 |
13:55 |
USD |
Prelim UoM Consumer Sentiment |
73.6 |
72.5 |
72.3 |
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 |
Previous |
|
Aug 21 |
1:30 |
AUD |
Monetary Policy Meeting Minutes |
|
|
3:00 |
NZD |
Inflation Expectations q/q |
2.4% |
|
|
23:50 |
JPY |
Trade Balance |
-0.30T |
|
|
Aug 22 |
0:30 |
AUD |
MI Leading Index m/m |
0.8% |
|
14:00 |
USD |
Existing Home Sales |
4.37M |
|
|
14:30 |
USD |
Crude Oil Inventories |
-3.7M |
|
|
18:00 |
USD |
FOMC Meeting Minutes |
||
|
Aug 23 |
12:30 |
USD |
Unemployment Claims |
366K |
|
13:00 |
USD |
Flash Manufacturing PMI |
51.4 |
|
|
14:00 |
USD |
New Home Sales |
350K |
|
|
23:30 |
AUD |
RBA Gov Stevens Speaks |
||
|
Aug 24 |
0:00 |
AUD |
CB Leading Index m/m |
0.4% |
|
12:30 |
USD |
Core Durable Goods Orders m/m |
-1.1% |
|
|
12:30 |
USD |
Durable Goods Orders m/m |
1.6% |
Click here for updated USD/JPY News.
Originally posted here
