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USD/JPY Fails to Break Above Range Despite Strong Rise in Consumption

By Baruch Spier
27 March 2014 13:36 GMT

Talking Points:

  • US GDP revised higher on strongest rise in consumption in 3-years
  • Initial jobless claims reported at the lowest in 3-months
  • USD/JPY fails to break above 6-day range top

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Actual

Expected

Previous Estimate

Prior Period

Revision of Prior Period

GDP Annualized Q/Q

(4Q T)

2.6%

2.7%

2.4%

4.1%

Personal Consumption

(4Q T)

3.3%

2.7%

2.6%

3.3%

Initial Jobless Claims

(MAR 22)

311K

323K

320K

321K

Continuing Claims

(MAR 15)

2823K

2882K

2889K

2876K

United States growth was revised higher in the fourth quarter, as the quarterly rise in personal consumption was reported at the strongest in three-years for that period. GDP was reported to have risen 2.6% (annualized) in a final estimate by the Commerce Department, beating expectations for a 2.7% rise and up from a previous official estimate of 2.4% growth in the final quarter of 2013. Meanwhile, Initial Jobless Claims fell to 311 thousand for the week ending on March 22, the lowest initial claims in three months and well below expectations and the previous week.

US jobs data and economic performance has come into focus since Fed Chair Yellen said last week that the central bank may end quantitative easing this fall and may raise interest rates as soon as 6 months after that. Yellen said her projections depend on economic conditions, which means that tightening of Fed policy could happen sooner if the job market continues to improve and the economy strengthens further.

USD/JPY 1-Minute: March 27, 2014

USDJPY-Fails-to-Break-Above-Range-Despite-Strong-Rise-in-Consumption_body_Picture_1.png, USD/JPY Fails to Break Above Range Despite Strong Rise in Consumption

That’s why the US Dollar rose higher against the Yen following the announcement of better than expected consumption and jobless claims, but USD/JPY failed to break above the 6-day range top at 102.64. Currency Strategist Ilya Spivak said he is waiting for a close above 102.75 before positioning to enter USD/JPY long.

Chart created by Baruch Spier using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .

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27 March 2014 13:36 GMT