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 finally gave up a bit of momentum on Friday as investors moved away from safe havens and ventured into more risk. The BoJ has been threatening intervention all week and the Prime Minister and the Governor of the BoJ went into emergency meetings when the yen dipped below 78.
|
Date |
Open |
High |
Low |
Change % |
|
|
Jul 27, 2012 |
78.47 |
78.32 |
78.68 |
78.08 |
0.19% |
|
Jul 26, 2012 |
78.32 |
78.11 |
78.35 |
78.02 |
0.27% |
|
Jul 25, 2012 |
78.11 |
78.12 |
78.28 |
78.07 |
-0.01% |
|
Jul 24, 2012 |
78.12 |
78.29 |
78.34 |
78.08 |
-0.22% |
|
Jul 23, 2012 |
78.29 |
78.47 |
78.47 |
77.94 |
-0.22% |
We’ll get a better look at how the Chinese and Japanese economies are performing via a bevy of sentiment surveys as China’s National Bureau of Statistics releases its July PMI on Tuesday night, and markets will be watching for the degree of disjunction between the official number, which came in at 50.2 in June, and the private sector PMI, which was in sub-50 contraction territory and remained there on its July flash reading (albeit at a marginally higher level than in June – we’ll get a second look at the July private sector PMI on Tuesday as well). Taiwan GDP on Monday night. Japan will release industrial production numbers on Sunday, and its data dump will continue with jobs and household spending released on Monday night and housing starts numbers on Tuesday night. The domestic economy will be front and center in Australia with new home sales (Monday), trade, and retail sales numbers (Wednesday) due out over the course of the week.
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 July 23-27 actual v. forecast for Yen, the Aussie, the Kiwi and USD
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul 23 |
AUD |
PPI q/q |
0.5% |
0.3% |
-0.3% |
|
Jul 24 |
USD |
Flash Manufacturing PMI |
51.8 |
52.1 |
52.5 |
|
NZD |
Trade Balance |
331M |
77M |
232M |
|
|
JPY |
Trade Balance |
-0.30T |
-0.39T |
-0.62T |
|
|
Jul 25 |
AUD |
CB Leading Index m/m |
0.4% |
-1.3% |
|
|
AUD |
CPI q/q |
0.5% |
0.6% |
0.1% |
|
|
USD |
New Home Sales |
350K |
372K |
382K |
|
|
USD |
Crude Oil Inventories |
2.7M |
-0.1M |
-0.8M |
|
|
NZD |
Official Cash Rate |
2.50% |
2.50% |
2.50% |
|
|
Jul 26 |
USD |
Core Durable Goods Orders m/m |
-1.1% |
0.1% |
0.8% |
|
USD |
Unemployment Claims |
353K |
381K |
388K |
|
|
USD |
Pending Home Sales m/m |
-1.4% |
0.6% |
5.4% |
|
|
JPY |
Tokyo Core CPI y/y |
-0.6% |
-0.6% |
-0.6% |
|
|
JPY |
Retail Sales y/y |
0.2% |
1.2% |
3.6% |
|
|
Jul 27 |
USD |
Advance GDP q/q |
1.5% |
1.5% |
1.9% |
|
USD |
Revised UoM Consumer Sentiment |
72.3 |
72.0 |
72.0 |
Historical:
Highest: 108.00 on Sep 19, 2008
Average: 87.08over 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 |
|
Jul 30 |
23:30 |
JPY |
Household Spending y/y |
4.0% |
|
Jul 31 |
1:00 |
NZD |
NBNZ Business Confidence |
12.6 |
|
1:30 |
AUD |
Building Approvals m/m |
27.3% |
|
|
1:30 |
AUD |
Private Sector Credit m/m |
0.5% |
|
|
1:30 |
JPY |
Average Cash Earnings y/y |
-1.1% |
|
|
12:30 |
USD |
Core PCE Price Index m/m |
0.1% |
|
|
12:30 |
USD |
Employment Cost Index q/q |
0.4% |
|
|
12:30 |
USD |
Personal Spending m/m |
0.0% |
|
|
13:00 |
USD |
S&P/CS Composite-20 HPI y/y |
-1.9% |
|
|
13:45 |
USD |
Chicago PMI |
52.9 |
|
|
14:00 |
USD |
CB Consumer Confidence |
62.0 |
|
|
Aug 1 |
1:30 |
AUD |
HPI q/q |
-1.1% |
|
12:15 |
USD |
ADP Non-Farm Employment Change |
176K |
|
|
14:00 |
USD |
ISM Manufacturing PMI |
49.7 |
|
|
18:15 |
USD |
FOMC Statement |
||
|
Aug 2 |
1:30 |
AUD |
Retail Sales m/m |
0.5% |
|
1:30 |
AUD |
Trade Balance |
-0.29B |
|
|
12:30 |
USD |
Unemployment Claims |
||
|
14:00 |
USD |
Factory Orders m/m |
0.7% |
|
|
23:30 |
AUD |
AIG Services Index |
48.8 |
|
|
Aug 3 |
12:30 |
USD |
Non-Farm Employment Change |
80K |
|
12:30 |
USD |
Unemployment Rate |
8.2% |
|
|
12:30 |
USD |
Average Hourly Earnings m/m |
0.3% |
|
|
14:00 |
USD |
ISM Non-Manufacturing PMI |
52.1 |
Click here to read USD/JPY Technical Analysis.
Originally posted here
