News Column

USD/JPY Needs Close Below 101.50 to Favor Bearish Forecast

May 15, 2014

David Song

Talking Points:

- Bearish USDOLLAR Outlook Favored on Close Below 10,470

- EUR/USD Holds Key1.3650-60 Support Even as 1Q GDP Disappoints

- USD/JPY Hits Fresh Monthly Low (101.30) But Needs Close Below 101.50



The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) may resume the downward trend from earlier this year as it retains the opening range from the beginning of the month, and the greenback may weaken further over the remainder of the week on another failed attempt to close above the 10,470 pivot.



Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10460.19

10487.07

10448.69

-0.02

122.37%



Given the limited market reaction to the better-than-expected U.S. data, it seems as though market participants are waiting for Fed Chair Janet Yellen as the central bank head is scheduled to speak later today, but there's certainly limited scope of seeing a major shift in the policy outlook as the committee remains in no rush to normalize monetary policy.



With that said, the dollar may continue to carve lows highs & lower lows going into the second-half of 2014, and the reserve currency remains at risk of giving back the advance from back in October (10,354) as Ms. Yellen remains reluctant to move away from the zero-interest rate policy (ZIRP).



USD/JPY Needs Close Below 101.50 to Favor Bearish Forecast





Read More:

US Dollar Forecast to Rally versus Euro, GBP, but Watch Yen and AUD

Sea Change in Central Bank Policy Leaves EUR/JPY, GBP/JPY Vulnerable



USDOLLAR Daily

USD/JPY Needs Close Below 101.50 to Favor Bearish Forecast

  • Failure to Close Above 10,470 to Highlight Lower High
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,354 to 10,375 (50.0 retracement)



    Release

    GMT

    Expected

    Actual

    Consumer Price Index (MoM) (APR)

    12:30

    0.3%

    0.3%

    Consumer Price Index (YoY) (APR)

    12:30

    2.0%

    2.0%

    Consumer Price Index ex Food and Energy (MoM) (APR)

    12:30

    0.1%

    0.2%

    Consumer Price Index ex Food and Energy (YoY) (APR)

    12:30

    1.7%

    1.8%

    Consumer Price Index n.s.a. (APR)

    12:30

    237.095

    237.072

    Consumer Price Index Core n.s.a. (APR)

    12:30

    236.914

    237.163

    Initial Jobless Claims (MAY 10)

    12:30

    320K

    297K

    Continuing Claims (MAY 3)

    12:30

    2690K

    2667K

    Empire Manufacturing (MAY)

    12:30

    6.00

    19.01

    Net Long-Term TIC Flows (MAR)

    13:00

    $40.0B

    $4.0B

    Total Net TIC Flows (MAR)

    13:00

    --

    -$126.1B

    Industrial Production (MoM) (APR)

    13:15

    0.0%

    -0.6%

    Capacity Utilization (APR)

    13:15

    79.1%

    78.6%

    Manufacturing Production (SIC) (APR)

    13:15

    0.3%

    -0.4%

    Philadelphia Fed Business Outlook (MAY)

    14:00

    14.0

    15.4

    Mortgage Delinquencies (1Q)

    14:00

    --

    6.11%

    MBA Mortgage Foreclosures (1Q)

    14:00

    --

    2.65%

    NAHB Housing Market Index (MAY)

    14:00

    49

    45

    Fed Chair Janet Yellen Speaks on U.S. Economy

    22:10
























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    Source: DailyFx