Ahead this week, forex traders will be looking to important economic data to be released from Japan. The releases this week will be critical in determining the broader direction of the Bank of Japan’s historic stimulus programs. The USD/JPY currency pair will need to see aggressive changes here in order to propel breaks out of this year’s trading range.
Upcoming Market Events
Here are some of the relevant market events for this week:
JPY Consumer Confidence Index – Market Estimate: 42.0 Previous Number: 41.1
On Monday August 11, 2014 at 5:00 GMT, Japan's Cabinet Office will release the Consumer Confidence Index. This Index measures the level of composite index based on studied households leaving out single-person homes. Financial confidence is one of the most important leading indicator of consumer spending. The Consumer Confidence Index is the result of overall economic activity. If the Consumer Confidence Index data comes out above 42.0, it will be a signal that less stimulus is needed in the Japanese economy.
USD/JPY Daily Chart:
(Chart Source: CornerTrader)
USD/JPY has remained range bound throughout the week. It failed to break Resistance 2 level that coincides with an even number of 103.00 and started drifting lower on Wednesday, having reached the low of the week 101.50 today (Friday). Technical traders could see the collapse coming as Monday and Tuesday daily candles fitted inside Friday (August 1) daily candle (two inside candles) meaning that range was narrowing and breakout coming. Although prices fell this week, key support of 100.80 is still intact and unbroken. Short-term support is now at 101.50. Prices are consolidating and major break up or down may occur any time from now. The data in these trends have also been confirmed by reports released by FXPips.
CAD Housing Starts- Market Estimate: 193.0K Previous Number: 198.3K
Later in the day at 12:15 GMT, Canada Mortgage and Housing Corporation (CMHC) will release the Housing Starts data. This data calculates yearly figures of new residential buildings that started construction during the earlier month. As building construction creates a wide-ranging ripple effect, this Housing Starts is considered to be an important indicator of economic health. For instance, employment of the construction workers, subcontractors and inspectors are created and different construction services are purchased by the builder. If the Housing Starts data emerge above 193.0K, it will be a good news for trend traders using the Canadian Dollar.
Thursday- August 14, 2014
USD Initial Jobless Claims - Market Estimate: 295K Previous Number: 289K
Around 12:30 GMT, the U.S. Department of Labor will release the Initial Jobless Claims data. This data calculates the figure of individuals who filed for unemployment insurance for the first time during the previous week. Unemployment is a vital consideration for those steering national monetary policy. Even though generally this is considered as a lagging indicator, the total figure of jobless people is an important signal of overall economic health as consumer spending is highly associated with the labor-market situations. If the Initial Jobless Claims data comes below 295K, it will be helpful for trends in the greenback.