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 collapsed after the non farms report, to trade at 79.85. Investors ran to the safety of the yen, pushing the dollar to record monthly lows.
The Bank of Japan on Friday said it will increase the size of its asset purchase program by 5 trillion yen ($61.88 billion) to a total of ?70 trillion, while leaving its policy interest rate in the current target range of 0% to 0.1%. The Bank of Japan increases the size of its asset purchase program by about 5 trillion yen, or $61.7 billion, meeting some analysts expectations but falling short of the aggressive action that economists say is required to end the nation’s deflation.
Japanese retail sales blow past estimates in March, offsetting some less-than-impressive numbers elsewhere in a heavy day for national economic data.
Major Economic Events for the past week actual v. forecast
|
AUD |
Interest Rate Decision |
3.75% |
4.00% |
4.25% |
|
USD |
ISM Manufacturing Index |
54.8 |
53.0 |
53.4 |
|
USD |
ADP Nonfarm Employment Change |
119K |
177K |
201K |
|
NZD |
Unemployment Rate |
6.7% |
6.3% |
6.4% |
|
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
USD |
Initial Jobless Claims |
365K |
380K |
392K |
|
USD |
Nonfarm Payrolls |
115K |
170K |
154K |
|
USD |
Unemployment Rate |
8.1% |
8.2% |
8.2% |
|
Ivey PMI |
52.7 |
61.0 |
63.5 |
Economic Highlights of the coming week that affect the AUD,JPY,NZD and USD
|
May 7 |
1:30 |
AUD |
Building Approvals m/m |
-7.8% |
|
1:30 |
AUD |
Retail Sales m/m |
0.2% |
|
|
May 8 |
1:30 |
AUD |
Trade Balance |
-0.48B |
|
9:30 |
AUD |
Annual Budget Release |
||
|
21:00 |
NZD |
RBNZ Financial Stability Report |
||
|
May 9 |
23:50 |
JPY |
Current Account |
0.85T |
|
May 10 |
1:30 |
AUD |
Unemployment Rate |
5.2% |
|
TBD |
CNY |
Trade Balance |
5.4B |
|
|
12:30 |
USD |
Trade Balance |
-46.0B |
|
|
12:30 |
USD |
Unemployment Claims |
365K |
|
|
May 11 |
1:30 |
CNY |
CPI y/y |
3.6% |
|
12:30 |
USD |
PPI m/m |
0.0% |
|
|
13:55 |
USD |
Prelim UoM Consumer Sentiment |
76.4 |
Upcoming Government Bond Auctions
Date Time Country
May 08 09:15 Austria
May 08 09:30 Belgium
May 08 14:30 UK
May 08 15:30 Italy
May 08 17:00 US
May 09 09:10 Sweden
May 09 09:30 Germany
May 09 09:30 Swiss
May 09 09:30 UK
May 09 14:30 Sweden
May 09 15:30 Italy
May 09 17:00 US
May 10 15:00 US
May 10 17:00 US
May 11 09:10 Italy BOT auction
May 11 10:00 Belgium
Originally posted here
