Fan Yang
3
All posts from Fan Yang
Fan Yang in Fan Yang,

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. 

(source: forexfactory.com)

February's numbers were revised lower as well. 

According to Bloomberg.com "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)