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16 Dec 2013
USD/JPY sliding on Yen strength as traders bide time before Fed fireworks
FXstreet.com (Barcelona) - The USD/JPY continues to be hammered Monday on Nikkei weakness. Traders likely to migrate back to focusing on DC and the Fed’s tapering prospects.
USD/JPY traders have their DC / Fed playbooks out
With the US Federal Reserve meeting this week, everything else seems a little trivial in terms of directional determinants for the USD/JPY. With DC politicians playing nice (thus far), the odds seem to be increasing that the Fed could begin tapering either this week or at January’s meeting. That would seem to put the odds of an upside breakout in USD/JPY heavily in the bulls’ favor.
In terms of data later in the Monday session, USD/JPY traders will be watching the following data points out of the US:
• US Non-Farm Productivity data
• US Unit Labor Costs
• US NY Empire State Manufacturing Index
• US Markit Manufacturing PMI
• US Net Long Term TIC Flows
• US Industrial Production & Capacity Utilization
Technical outlook for USD/JPY
Technicians still say the USD/JPY could be in the early stages of an downside move that has an eventual downside target that takes the cross all the way back down to 94 (from 103 and change currently). Before 94 is anywhere near approached, the first and second levels of support at 102.98 and 101.62 will have to be broken. A close above 103.54 would change this bearish outlook for the pair and a close above 103.73 will confirm that the more bullish scenario is unfolding.
USD/JPY traders have their DC / Fed playbooks out
With the US Federal Reserve meeting this week, everything else seems a little trivial in terms of directional determinants for the USD/JPY. With DC politicians playing nice (thus far), the odds seem to be increasing that the Fed could begin tapering either this week or at January’s meeting. That would seem to put the odds of an upside breakout in USD/JPY heavily in the bulls’ favor.
In terms of data later in the Monday session, USD/JPY traders will be watching the following data points out of the US:
• US Non-Farm Productivity data
• US Unit Labor Costs
• US NY Empire State Manufacturing Index
• US Markit Manufacturing PMI
• US Net Long Term TIC Flows
• US Industrial Production & Capacity Utilization
Technical outlook for USD/JPY
Technicians still say the USD/JPY could be in the early stages of an downside move that has an eventual downside target that takes the cross all the way back down to 94 (from 103 and change currently). Before 94 is anywhere near approached, the first and second levels of support at 102.98 and 101.62 will have to be broken. A close above 103.54 would change this bearish outlook for the pair and a close above 103.73 will confirm that the more bullish scenario is unfolding.