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 ended the week at 78.01 and as seen on the chart below, the USD has lost strength against the JPY all week.

Date

Last

Open

High

Low

Change %

Jun 01, 2012

78.01

78.55

78.65

77.66

-0.69%

May 31, 2012

78.55

78.98

78.99

78.21

-0.54%

May 30, 2012

78.98

79.53

79.56

78.87

-0.69%

May 29, 2012

79.53

79.58

79.64

79.38

-0.06%

May 28, 2012

79.58

79.61

79.63

79.34

-0.03%

The euro tumbled overnight amid fears that debt-riddled Greece may leave the eurozone and Spain’s banking troubles could require an international rescue.

The euro was at Y97 in early Asian trade, after falling to Y96.51 in New York, the lowest level since December 2000.

The common currency bought $1.2354 against $1.2361 in New York late on Thursday. The dollar was at Y78.50 against 78.33.

Risk aversion continues as the main market theme.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Major Economic Events for the week of May 28- June 1 actual v. forecast for Yen, the Aussie, and the Kiwi

Time

Cur.

Event

Actual

Forecast

Previous

Monday, May 28

19:30

JPY

Unemployment Rate

4.6%

4.5%

4.5%

19:50

JPY

Retail Sales (YoY)

5.8%

6.3%

10.3%

21:00

AUD

HIA New Home Sales (MoM)

6.9%

-9.4%

Tuesday, May 29

18:45

NZD

Building Consents (MoM)

-7.2%

-10.0%

19.8%

20:35

JPY

BoJ Governor Shirakawa Speaks

21:30

AUD

Retail Sales (MoM)

-0.2%

0.2%

1.1%

21:30

AUD

Construction Work Done (QoQ)

5.5%

3.0%

-3.4%

Wednesday, May 30

19:50

JPY

Industrial Production (MoM)

0.2%

0.5%

1.3%

21:30

AUD

Building Approvals (MoM)

-8.7%

0.7%

6.0%

21:30

AUD

Private New Capital Expenditure (QoQ)

6.1%

4.0%

-0.7%

Thursday, May 31

19:50

JPY

Capital Spending

3.30%

1.30%

7.60%

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

Forecast

Previous

Jun 4

1:30

AUD

ANZ Job Advertisements m/m

-3.1%

1:30

AUD

Company Operating Profits q/q

-6.5%

14:00

USD

Factory Orders m/m

-1.5%

23:30

AUD

AIG Services Index

39.6

Jun 5

1:30

AUD

Current Account

-8.4B

4:30

AUD

Cash Rate

3.75%

3.75%

4:30

AUD

RBA Rate Statement

14:00

USD

ISM Non-Manufacturing PMI

53.5

Jun 6

1:30

AUD

GDP q/q

0.4%

12:30

USD

Revised Nonfarm Productivity q/q

-0.5%

14:30

USD

Crude Oil Inventories

18:00

USD

Beige Book

Jun 7

1:30

AUD

Employment Change

4.9%

1:30

AUD

Unemployment Rate

15.5K

12:30

USD

Unemployment Claims

383K

14:00

USD

Fed Chairman Bernanke Testifies

23:50

JPY

Current Account

0.79T

23:50

JPY

Final GDP q/q

1.0%

Jun 8

1:30

AUD

Trade Balance

-1.59B

1:30

AUD

Home Loans m/m

0.3%

12:30

USD

Trade Balance

-51.8B

14:00

USD

Fed Chairman Bernanke Testifies

Click here for updated USD/JPY News.

Originally posted here