Category: USD JPY Forecast

USD/JPY Forecast May 25-29



USD/JPY rebounded last week with strong gains, as the yen lost over 200 points. The pair closed at 121.47. There are nine events this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

US housing numbers were mixed and manufacturing numbers slipped, but the FOMC minutes were optimistic in tone, as policymakers remain confident that Q2 will outperform a disappointing Q2. Over in Japan, Preliminary GDP beat the estimate, but this wasn’t enough to stop the yen’s slide.

Updates:

USD/JPY graph with support and resistance lines on it:

USD_JPY_Forecast.May 25-29.

  1. Trade Balance: Sunday, 23:50. Trade Balance is closely linked to currency demand, as foreigners must purchase yen to buy Japanese exports. The indicator improved to 0.00 trillion yen in March, beating the estimate of -0.41 trillion. This marked the first time the country did not post a monthly trade deficit in over 4 years. Will the upswing continue in the April report?
  2. BOJ Monthly Report: Monday, 5:00. This minor indicator contains the BOJ’s analysis of economic conditions, as well as statistical data.
  3. SPPI: Monday, 23:50. This index measures corporate inflation and has been losing ground in the past few releases. The indicator dipped to 3.2% in March, within expectations.
  4. Monetary Policy Meeting Minutes: Tuesday, 23:50. Analysts keep close tabs on the BOJ’s minutes and will be looking for any hints regarding future policy interest rate policy. With the Japanese economy continuing to struggle, no surprises are expected from the minutes.
  5. Retail Sales: Wednesday, 23:50. Retail Sales is the primary gauge of consumer spending, and should be treated as a market-mover. The indicator looked awful in March, posting a sharp loss of 9.7%. This was considerably worse than the estimate of a 7.4% decline.
  6. Household Spending: Thursday, 23:30. Household Spending is a key indicator, as consumer spending is crucial for economic growth. The indicator plunged in March, coming in at -10.6%. Still, this beat the estimate of -11.7%. Will we see some improvement in the April release?
  7. Tokyo Core CPI: Thursday, 23:30. This is the primary gauge of consumer inflation, and an unexpected reading can affect the direction of USD/JPY. The index had been steady during 2015, with three straight readings of 2.2%. However, in the April report, the indicator managed just a weak gain of 0.4%.
  8. Preliminary Industrial Production: Thursday, 23:50. This important indicator provides a snapshot of the level of activity in the manufacturing sector. The indicator improved in May, but still posted a decline of 0.3%.
  9. Housing Starts: Friday, 5:00. In March, Housing Starts ended a streak of declines, posting a respectable gain of 0.7%. This easily beat the estimate of -1.8%.

* All times are GMT

USD/JPY Technical Analysis

USD/JPY started the week at 119.35 and touched a low of 119.34. It was all uphill from there, as the pair climbed all the way to 121.53, breaking support at 122.19 (discussed last week). The pair closed the week at 121.47.

Live chart of USD/JPY:


Technical lines from top to bottom:

We start with resistance at 124.16. This line marked the start of a yen rally in June 2007, which saw USD/JPY drop to the 96 level.

123.11 marked the start of a lengthy yen rally in July 2007.

122.19 is the next resistance line.

121.39 was breached by the pair, which will start the week just above this line. It had held firm since mid-March.

120.65 was an important cap in January and February.

119.88 has strengthened in support, following strong gains by USD/JPY during the week.

118.68 has been busy in the month of May, but has some breathing room following the dollar rally.

The next support line is 117.94.

116.82 has remained intact since mid-January.

115.85 is the final support level for now.

I am bullish on USD/JPY

Even numbers were not impressive last week, but the yen couldn’t take advantage as the pair moved back above the 120 level. The US economy is expected to improve in Q2, and the sharp divergence in monetary policy between the Federal Reserve and the BOJ could add to the yen’s woes.

In our latest podcast, we discuss commodity currencies, oil hedging and preview next week’s events.

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USD/JPY Forecast May 18-22

USD/JPY Forecast May 18-22

USD/JPY lost ground last week, as the yen gained 70 points. The pair closed slightly above the 119 level, at 119.10. There are six events this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The yen posted gains last week, taking advantage of weak US numbers, in particular weak US retail sales.

USD/JPY Forecast May 11-15

USD/JPY Forecast May 11-15

USD/JPY had an uneventful week, posting slight losses. The pair closed slightly below the 120 level, at 119.62. There are nine events this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The mixed NFP report in the US helped the yen hold its own against the US dollar last week. Japanese markets

USD/JPY Forecast May 4-8

USD/JPY Forecast May 4-8

USD/JPY gained about 100 points last week and closed just above the 120 line. The upcoming week is very quiet, with just two events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. US numbers looked weak, as Consumer Confidence and Manufacturing PMI reports missed expectations. In Japan, inflation indicators

USD/JPY Forecast Apr. 27 – May 1

USD/JPY Forecast Apr. 27 – May 1

USD/JPY pushed above the 120 line, but then retracted and closed the week almost unchanged. The pair closed at 118.96. The upcoming week has nine events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. In the US, there was good news to start off the week as existing home sales

USD/JPY Forecast Apr. 20-24

USD/JPY Forecast Apr. 20-24

USD/JPY reversed directions last week and lost over 100 points. The pair closed at 118.75. The upcoming week is a quiet one, with just five events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The US dollar lost ground on disappointing economic reports, including retail sales and housing data. There was better

USD/JPY Forecast Apr. 13-17

USD/JPY Forecast Apr. 13-17

USD/JPY gained over 100 points last week and broke above the symbolic 120 level. The pair closed at 120.13. The upcoming week is a quiet one, with just four events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. Japanese data was uneventful last week, with no major

USD/JPY Forecast Apr. 6-10

USD/JPY Forecast Apr. 6-10

USD/JPY briefly pushed above the 120 level, but showed little over the course of the week. The pair closed slightly below the 119 line. There are eight indicators this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. In Japan, the key Tankan indices were a mix. Over in the US, the

USD/JPY Forecast Mar. 30-Apr. 3

USD/JPY Forecast Mar. 30-Apr. 3

USD/JPY improved for a second straight week, as USD/JPY closed at the 119 line. This week’s highlights are the Tankan indices. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. In Japan, inflation remains at low levels, while Retail Sales missed expectations. In the US, key data painted

USD/JPY Forecast Mar. 23-27

USD/JPY Forecast Mar. 23-27

USD/JPY dropped about 140 points last week, as USD/JPY closed just below the 120 line. This week’s highlights are Tokyo Core CPI and Retail Sales. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The Japanese yen took advantage of broad US dollar weakness after the