THE TAKEAWAY: USD Initial Jobless Claims (NOV 17) > 410K as expected, prior 451K (revised from 439K) > USD U. of Michigan Confidence (NOV F) > 82.7 versus 84.5 expected, prior 84.9 > USD/JPY BULLISH
US economic data remains on the up-and-up as two more key prints have indicated that the US economy is showing signs of strength. In the labor market, the Initial Jobless Claims report for the week ending November 17, released at 08:30 EST / 13:30 GMT, fell by 41K, to 410K from 451K. It appears that the effects of Hurricane Sandy are still hurting the overall jobs market, and when combined with the uncertainty still surrounding the fiscal cliff, it is possible that we don’t see a rebound to the ~360K claims readings that have been common the past few months until 2Q’13.
While the big drop in Initial Jobless Claims proved bullish for the USD/JPY, the pair eventually fell back from its highest level since April 6 just above 82.50 to as low as 82.26 ahead of the final November U. of Michigan Confidence reading, released at 09:55 EST / 14:55 GMT. While the final came in slightly weaker than the preliminary, at 82.7 from 84.9, today’s print was the highest final of the entire year, and highest in five years. Although the economy has been improving marginally, the decline in US stock markets – which themselves are a reflection of confidence – has likely dampened near-term enthusiasm among consumers.
USD/JPY 1-minute Chart: November 21, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the releases, the USD/JPY had traded at 82.35, when this report was written, from 82.45 before the Initial Jobless Claims print. A new November high was set at 82.53 following the Claims reading, while the U. of Michigan Confidence print has buffered the pullback from the top. After clearing 81.75, the next major resistance for the USD/JPY comes at the late-March highs at 83.30/55.
--- Written by Christopher Vecchio, Currency Analyst
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