April 25-29, 2011 currency weekly forecast for the USD/JPY pair using graphs and indicators.
The downside move for the USD/JPY pair continued for the second week. The correctional move started 2 weeks ago is affected by a strong selling wave on the U.S. dollar against all major currencies.
On the other hand, the Japanese yen is losing ground versus other major currencies such as EUR and GBP, as carry trades are back to strike the currency market slowing the demand on the Japanese yen.
The Japanese yen fell against major currencies, amid increasing risk appetite, after a substantial rise witnessed in the U.S. housing data last week, which has increased the optimism about a recovery in the global economy. Nonetheless, the yen maintained the strength against the US dollar on its fragile status and fears over the US fiscal outlook.
Asian stock market rallied last week following the footsteps of Wall Street, where the strong housing market data from U.S. economy and good earnings improved the risk appetite and increased demand for higher-yielding assets.
Although the risk appetite was seen in the market, the USD/JPY pair was still under pressure as Japanese data were pessimistic enough to fuel fear about the Japanese economy, which it didn't escape yet from the negative effect of the March 11 quake and tsunami.
Japaneconomy will issue a set of fundamentals this week beside the BOJ interest rate decision. The BOJ's statement will be the main focus for the market, as investors are waiting any new steps from the central bank to deal with the current disaster in Japan.
Major highlights for this week that will affect the USD/JPY pair's trading:
Monday April 25:
The U.S. economy will start the week with fundamental regarding housing sector, as new home sales index for March will be published at 14:00 GMT, and is expected to show a rise of 10.0% compared to the previous drop of 16.9%.
On the contrary, the Japanese economy won't issue any data on Monday.
Tuesday April 26:
The United States will release consumer confidence indicator for April at 14:00 GMT, and the reading is expected to show improvement to 64.5 compare with the previous 63.4.
Wednesday April 27:
The Japanese economy will be back to work on Tuesday at 23:50 GMT and issue the seasonally adjusted retail trade for March, which had a previous reading of 0.8%, while the annual reading had a previous reading of 0.1% in February.
Wednesday will be a big day for the U.S, as the Federal Open Market Committee will announce its rate decision at 16:30 GMT, where the market expectations indicate another hold on rates at its lowest level near zero. While with the change of the FOMC schedule Bernanke will present the FOMC Press Conference at 18:15 GMT.
At 12:30 GMT, U.S. will release durable goods orders for March, where it's expected to increase to 1.5% from the previous decline of 0.9%.
Thursday April 28:
Japanwill take the lead at 23:30 GMT, when it will issue jobless rate for March which had a previous reading of 4.6%. At the same time, household spending indicator for March will be published with a previous reading of –0.2%.
At 23:30 GMT, Japanese economy will release the yearly national consumer price index for March, which had a previous reading of 0.0%. As for the reading exclude fresh food (the BOJ favorite indicator for inflation) had a previous reading of –0.3%.
The Japanese industrial production for March will release at 23:50 GMT and it had a previous reading of 1.8%.
The day will start with the BOJ announcing its interest rate decision, and they are expected to keep it steady at 0.10%.
At 05:00 GMT, Japan will issue yearly housing starts index for March, which had a previous reading of 10.1% while the construction orders index for March is expected to show an increase of 19.5%.
Meanwhile, the US economy is to release important data that have a heavy impact on the nation currency and the market, the economy will show its gross domestic product for the quarter of January to March at 12:30 GMT and the economy is expected to expand by 2.4% compared with a previous 0.4% in the fourth quarter of 2010.
The annualized GDP is to grow 1.8% during the year ended March as expected, from 3.1%.
The US personal consumption index will advance by 2.0% in the first quarter, from a 4.0% increase last quarter, while the core personal consumption expenditure index is to jump to 1.2% from 0.4%.
Pending home sales at 14:00 is estimated to show an advance by 1.0% in March from 2.1%.
Friday April 29:
The US personal spending index for the March will be released at 12:30 GMT; expectations indicate the index is to incline by 0.5% in March, compared with a previous 0.7%.
Furthermore, the world's largest economy will release the US U. of Michigan confidence final reading for the month of April at 13:45 and is expected with an upside revision to 70.0 from 69.6.
Originally posted here
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