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A Look at EUR/USD and USD/JPY after Disappointing Durable Goods Data

Today's key economic data out of the US was the durable goods orders number for March. It was disappointing. 


February's numbers were revised lower as well. 

According to "The weakness helps explain a paring of factory workforces. The number of employees on manufacturing payrolls fell by 29,000 last month after an 18,000 drop in February. That marked the largest back-to-back declines since the two months ended in January 2010." (Bloomberg)

The market reacted by selling the USD, but the anticipation remains focused on tomorrow's FOMC meeting. 

EUR/USD for example has been choppily declining after forming a price top. So far, that price top was respected as resistance. This week, price tagged 1.1220 and started to rebound. Today's durable goods data gave this correction a jolt as the USD slid.

Still, the overall bias is bearish in the second half of April. Tomorrow's FOMC meeting will be key. Meanwhile, the 1.1325-1.1355 area is critical as well. So if after the FOMC meeting, price can hold under this area, EUR/USD should still be bearish.

However, a break above 1.1360 and the falling speedline in the 1H chart would bring EUR/USD back into bullish mode. In this scenario, we should anticipate a test of the 1.15 area. 

EUR/USD 1H Chart 4/26

(click to enlarge)

Now, the USD/JPY also saw a bearish reaction. However, it appears that bulls are still dominant in this market. The 1H chart shows a market that has established a price bottom and is starting a bullish trend. 

This week's bearish correction is being tested as price tries to break above 111. We will probably see price hang around 111 ahead of the FOMC session. 

I think the key area to monitor after the FOMC meeting will be the 110 area. If price can hold north of it, we should see a bullish USD/JPY. South of 110, and USD/JPY is vulnerable to a retest of the 107.60 area .

USD/JPY 1H Chart 4/26

(click to enlarge)