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27 Aug 2013
USD/JPY still correcting higher ST after Durable Goods low; target 98.91?
FXstreet.com (Barcelona) - The USD/JPY absorbed the very weak Durable Goods data out of the US, stumbled initially and then rallied sharply starting at 13:00 GMT. It peaked at 18:00, however and has given back most of those gains.
Should the Dollar drop or rise? The data flow says “drop”
Weak US Durable Goods data followed last week’s bad housing data and the previous week’s bad manufacturing and sentiment data. So far, the talking heads are celebrating the fact that the FOMC may have to postpone their tapering plans. But at some point, isn’t bad news simply bad news?
The US Dollar Index (DXY) and the USD/JPY dropped immediately following the data release at 12:30 GMT, but then quickly recovered nearly all of the losses. After running out of steam for its afternoon rally at around 17:30 GMT, the USD/JPY has tumbled back towards the lower half of Monday’s trading range at 98.43.
There will be no Japanese data out on Tuesday, so traders will have to focus on the US S&P Case Schiller Home Price Index, US Consumer Confidence numbers and the US Richmond Fed Manufacturing Index.
Technical outlook for USD/JPY
The USD/JPY’s long-term outlook is bearish according to technicians. They have the ultimate downside target at 92.53. However, short-term they still are calling for a trading target in the Yen of 99.69 as the current upside correction plays out. Short-term support comes in at 98.06 – the highest closing hourly peak from 8/18 and is backed up by horizontal line support at around 97.
Should the Dollar drop or rise? The data flow says “drop”
Weak US Durable Goods data followed last week’s bad housing data and the previous week’s bad manufacturing and sentiment data. So far, the talking heads are celebrating the fact that the FOMC may have to postpone their tapering plans. But at some point, isn’t bad news simply bad news?
The US Dollar Index (DXY) and the USD/JPY dropped immediately following the data release at 12:30 GMT, but then quickly recovered nearly all of the losses. After running out of steam for its afternoon rally at around 17:30 GMT, the USD/JPY has tumbled back towards the lower half of Monday’s trading range at 98.43.
There will be no Japanese data out on Tuesday, so traders will have to focus on the US S&P Case Schiller Home Price Index, US Consumer Confidence numbers and the US Richmond Fed Manufacturing Index.
Technical outlook for USD/JPY
The USD/JPY’s long-term outlook is bearish according to technicians. They have the ultimate downside target at 92.53. However, short-term they still are calling for a trading target in the Yen of 99.69 as the current upside correction plays out. Short-term support comes in at 98.06 – the highest closing hourly peak from 8/18 and is backed up by horizontal line support at around 97.