USD/JPY Weekly Fundamental Analysis September 10-14, 2012, Forecast

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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 fell to its lowest level by the close on Friday, trading at 78.26. The pair had been stuck in the bottom of the 78 range for the last two weeks, but after the ECB bond program announcement, traders moved to more risk away from the yen, which allowed the pair to move upwards trading as high at 79.03 until the lackluster jobs report on Friday, which all but assured markets of Fed monetary stimulus come September 13th.

This weakened the US dollar globally, seeing the euro break above the 1.28 price level. Risk on continued to be the market them, as traders pushed gold, and silver to new highs, but the JPY gained against the USD trading as low as 78.02

Date

Last

Open

High

Low

Change %

Sep 07, 2012

78.26

78.89

79.02

78.02

-0.80%

Sep 06, 2012

78.89

78.42

79.03

78.38

0.60%

Sep 05, 2012

78.43

78.48

78.54

78.31

-0.07%

Sep 04, 2012

78.48

78.34

78.48

78.29

0.18%

Sep 03, 2012

78.34

78.31

78.40

78.20

0.05%

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.  

Major Economic Events for the week of September 3-7, 2012 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Date

Time

Currency

Event

Actual

Forecast

Previous

 Sep. 03

00:50

JPY

Capital Spending 

7.70%

8.90%

3.30%

 

02:30

AUD

Company Gross Operating Profits (QoQ) 

-0.7%

1.0%

-3.7%

 

02:30

AUD

Retail Sales (MoM) 

-0.8%

0.2%

1.2%

Sep. 04

02:30

AUD

Current Account 

-11.8B

-12.2B

-13.0B

 

05:30

AUD

Interest Rate Decision 

3.50%

3.50%

3.50%

 

15:00

USD

ISM Manufacturing Index 

49.6

50.0

49.8

Sep. 05

02:30

AUD

GDP (QoQ) 

0.6%

0.7%

1.4%

 

13:30

USD

Nonfarm Productivity (QoQ) 

2.2%

1.8%

1.6%

 

13:30

USD

Unit Labor Costs (QoQ) 

1.5%

1.5%

1.7%

 Sep. 06

02:30

AUD

Employment Change 

-8.8K

5.0K

11.7K

 

02:30

AUD

Unemployment Rate 

5.1%

5.3%

5.2%

 

13:15

USD

ADP Nonfarm Employment Change 

201K

140K

173K

 

13:30

USD

Initial Jobless Claims 

365K

370K

377K

 

13:30

USD

Continuing Jobless Claims 

3322K

3315K

3328K

 

15:00

USD

ISM Non-Manufacturing Index 

53.7

52.5

52.6

Sep. 07

02:30

AUD

Trade Balance 

-0.56B

-0.30B

-0.23B

 

13:30

USD

Average Hourly Earnings (MoM) 

0.0%

0.2%

0.1%

 

13:30

USD

Nonfarm Payrolls 

96K

125K

141K

 

13:30

USD

Unemployment Rate 

8.1%

8.3%

8.3%

 

13:30

USD

Average Weekly Hours 

34.4

34.5

34.4

 

13:30

USD

Private Nonfarm Payrolls 

103K

138K

162K

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

Forecast

Previous

Sep. 10

00:50

JPY

GDP (QoQ) 

0.3% 

0.3% 

 

02:30

AUD

Home Loans (MoM) 

 

1.3% 

Sep. 11

00:50

JPY

BSI Large Manufacturing Conditions 

 

-5.7 

 

02:30

AUD

NAB Business Confidence 

 

 

13:30

USD

Trade Balance 

-44.2B 

-42.9B 

Sep. 12 

01:30

AUD

Westpac Consumer Sentiment 

 

-2.50% 

 

13:30

USD

Import Price Index (MoM) 

1.3% 

-0.6% 

 

22:00

NZD

Interest Rate Decision 

2.50% 

2.50% 

Sep. 14

05:30

JPY

Industrial Production (MoM) 

 

-1.2%

Government Bond Auction

Date Time Country 

Sep 10 09:30 Germany 

Sep 10 15:30 Italy  

Sep 11 00:30 Japan 

Sep 11 08:30 Holland 

Sep 11 09:10 Greece 

Sep 11 09:30 UK 

Sep 11 14:30 UK 

Sep 11 17:00 US 

Sep 12 09:10 Italy  

Sep 12 09:10 Sweden 

Sep 12 09:30 Germany 

Sep 12 09:30 Swiss 

Sep 12 14:30 Sweden 

Sep 12 17:00 US 

Sep 13 00:30 Japan 

Sep 13 09:10 Italy  

Sep 13 09:30 UK 

Sep 13 15:00 US 

Sep 13 17:00 US 

Sep 14 10:00 Belgium

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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