USD/JPY forecast Fundamental Analysis for June 20-24, 2011 : The USD/JPY pair ended last week with gains, as the US dollar was able to dominate the currency market after the disappointed data from the euro-zone in addition to increasing the inflation pressure on the Feds.
The U.S. economy released its consumer price index for May, where the annual reading increased by 3.6% higher than the previous and the expected reading, to increase the inflation pressure on the Federal Reserve Bank.
The Bank of Japan kept its interest rate steady between 0.00% and 0.10%. The BOJ indicated to recovery in the Japanese economy supported by the gradual improvement in domestic spending.
As expected, the Japanese central bank kept the Asset Purchase Fund at 10 trillion yen as well as the Credit-loan Program at 30 trillion yen. The bank announced a new lending program by 500 billion yen to support the companies' recovery.
Furthermore, greenback was rebound against the yen after Machine orders in Japan unexpectedly declined in April, indicating that companies remain concerned about the strength of the recovery.
The risk aversion drove investors to sell-off the euro and other major currencies, and the world's reserve currency became the winner. The BOJ is taking extra measures in order to support the Japanese economy; these measures are driving the yen down against the dollar and helped the greenback to win more momentum versus other majors.
Major highlights for this week that will affect the USD/JPY pair's trading:
Monday June 20:
On Monday at 23:50 GMT (Sunday), Japan will release the merchandise trade balance for May, where it's expected to show a deficit of 711.1 billion yen compare to the previous deficit of 464.8 billion yen. The adjusted merchandise trade balance is projected to come with a deficit of 520.0 billion yen compare to the previous of – 496.4 billion yen.
The annual merchandise trade exports for May is expected to retreat by 8.1% from the previous decline of 12.4%, while the annual merchandise trade imports is expected to increase by 11.6% from 8.9%.
The Japanese coincident index for April will be publish at 05:00 GMT, where the prior reading was 104.8, as for the leading index for April, it will be up at the same time with a prior reading of 96.4.
Tuesday June 21:
The Japanese economy will start Tuesday at 04:30 GMT, with the all industry activity index for April with a previous reading of –6.3%.
The U.S. economy will take the lead at 14:00 GMT, and release the existing home sales index for May, where it's expected to fall by 4.0% at 4.85 million from 5.05 million.
Wednesday June 22:
Japan will issue the annual supermarkets sales index for May, where it's expected to come at –1.3%.
The U.S. economy will issue MBA mortgage applications at 11:00 GMT, with a previous of 8.2%. At 16:30 GMT the Federal Reserve Bank will announce its Open Market Committee rate decision, where all eyes will be focus on the central bank statement as they are expected to keep rates steady at 0.0-0.25%. The Feds Bernanke will speak at a press conference at 18:15 GMT.
Thursday June 23:
At 12:30 GMT the U.S. economy will release the weekly initial claims, where the number of people filing for first-time claims for the state unemployment last week eased to 414 thousand.
The U.S. economy will release the existing home sales index for May at 14:00 GMT, where it's expected to fall by 4.0% to 310 thousand from 323 thousand.
Friday June 24:
The United States will end the week by issuing a number of important economic data, starting with the durable goods orders for May at 12:30 GMT, where it's expected to come at 2.0% compare to the previous drop of 3.6%. The durable goods excluding transportation for May are expected to come at 1.0% from the prior –1.5%.
At 12:30 GMT, the U.S. economy will announce the final reading for the gross domestic product for the first quarter, where it is expected with an upside revision to 1.9% from 1.8%.
The core personal consumption expenditure during quarter one is expected to remain at 1.4% also personal consumption to remain unrevised at 2.2%.
USD/JPY Technical Analysis for June 20, 2011
The USD/JPY found itself falling on Friday and stopping right at the 80 level. This is an interesting turn of events, as the market knows that the area is where the central banks pushed price above the last round of interventions. Because of this, it is essentially become a game of chicken. Under most circumstances, the banks lose, and can only slow down the move. However, this move was coordinated, which makes this an even more dangerous game. Because of this, we are spectators, not participants.
The U.S. economy released its consumer price index for May, where the annual reading increased by 3.6% higher than the previous and the expected reading, to increase the inflation pressure on the Federal Reserve Bank.
The Bank of Japan kept its interest rate steady between 0.00% and 0.10%. The BOJ indicated to recovery in the Japanese economy supported by the gradual improvement in domestic spending.
As expected, the Japanese central bank kept the Asset Purchase Fund at 10 trillion yen as well as the Credit-loan Program at 30 trillion yen. The bank announced a new lending program by 500 billion yen to support the companies' recovery.
Furthermore, greenback was rebound against the yen after Machine orders in Japan unexpectedly declined in April, indicating that companies remain concerned about the strength of the recovery.
The risk aversion drove investors to sell-off the euro and other major currencies, and the world's reserve currency became the winner. The BOJ is taking extra measures in order to support the Japanese economy; these measures are driving the yen down against the dollar and helped the greenback to win more momentum versus other majors.
Major highlights for this week that will affect the USD/JPY pair's trading:
Monday June 20:
On Monday at 23:50 GMT (Sunday), Japan will release the merchandise trade balance for May, where it's expected to show a deficit of 711.1 billion yen compare to the previous deficit of 464.8 billion yen. The adjusted merchandise trade balance is projected to come with a deficit of 520.0 billion yen compare to the previous of – 496.4 billion yen.
The annual merchandise trade exports for May is expected to retreat by 8.1% from the previous decline of 12.4%, while the annual merchandise trade imports is expected to increase by 11.6% from 8.9%.
The Japanese coincident index for April will be publish at 05:00 GMT, where the prior reading was 104.8, as for the leading index for April, it will be up at the same time with a prior reading of 96.4.
Tuesday June 21:
The Japanese economy will start Tuesday at 04:30 GMT, with the all industry activity index for April with a previous reading of –6.3%.
The U.S. economy will take the lead at 14:00 GMT, and release the existing home sales index for May, where it's expected to fall by 4.0% at 4.85 million from 5.05 million.
Wednesday June 22:
Japan will issue the annual supermarkets sales index for May, where it's expected to come at –1.3%.
The U.S. economy will issue MBA mortgage applications at 11:00 GMT, with a previous of 8.2%. At 16:30 GMT the Federal Reserve Bank will announce its Open Market Committee rate decision, where all eyes will be focus on the central bank statement as they are expected to keep rates steady at 0.0-0.25%. The Feds Bernanke will speak at a press conference at 18:15 GMT.
Thursday June 23:
At 12:30 GMT the U.S. economy will release the weekly initial claims, where the number of people filing for first-time claims for the state unemployment last week eased to 414 thousand.
The U.S. economy will release the existing home sales index for May at 14:00 GMT, where it's expected to fall by 4.0% to 310 thousand from 323 thousand.
Friday June 24:
The United States will end the week by issuing a number of important economic data, starting with the durable goods orders for May at 12:30 GMT, where it's expected to come at 2.0% compare to the previous drop of 3.6%. The durable goods excluding transportation for May are expected to come at 1.0% from the prior –1.5%.
At 12:30 GMT, the U.S. economy will announce the final reading for the gross domestic product for the first quarter, where it is expected with an upside revision to 1.9% from 1.8%.
The core personal consumption expenditure during quarter one is expected to remain at 1.4% also personal consumption to remain unrevised at 2.2%.
USD/JPY Technical Analysis for June 20, 2011
The USD/JPY found itself falling on Friday and stopping right at the 80 level. This is an interesting turn of events, as the market knows that the area is where the central banks pushed price above the last round of interventions. Because of this, it is essentially become a game of chicken. Under most circumstances, the banks lose, and can only slow down the move. However, this move was coordinated, which makes this an even more dangerous game. Because of this, we are spectators, not participants.
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