Category: USD JPY Forecast

USD/JPY Forecast Jul. 28 – Aug. 1



USD/JPY rose from the lows approaching the well known 102 line once again in a week that saw lots of dollar strength. Will it pick a direction now? Consumer related figures such as retail sales and household spending stand out  Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

In Japan, inflation numbers came out more than expected and speculation about the BOJ’s next moves “stole the show”: it seems that the economic improvement is not moving fast enough for investors. With the government seeming unable to introduce new reforms, the BOJ could come in handy and lend a helping hand. In the US, most data has been good, supporting a stronger US dollar. Will this continue? Let’s start:

Updates:

USD/JPY graph with support and resistance lines on it. Click to enlarge:

USDJPY July 28 August 1 2014 technical dollar yen analysis fundamental analysis for currency trading

  1. Household Spending: Monday, 23:30. The level of consumption is another measure of economic growth and is naturally related to inflation. After a second surprising drop in May (one month after the tax hike), another drop of 3.7% is expected, but a bounce cannot be ruled out.
  2. Unemployment Rate: Monday, 23:30. Japan enjoys one of the lowest levels of unemployment in the Western world: 3.5%. A similar number is expected now. It has a low impact due to the focus that the BOJ has on inflation.
  3. Retail Sales: Monday, 23:50. The volume of sales has stabilized in May (-0.4%) after a big and expected drop in April (4.3%) that is related to the tax hike. Year over year, sales are expected to slide by another 0.4%. 
  4. Industrial Production: Tuesday, 23:50. The story is similar in industrial production: after a plunge of 2.8% in April, we have seen a rise of 0.5% in May. The see-saw is likely to continue with a drop of 1% predicted now.
  5. Average Cash Earnings: Thursday, 1:30.  The value of cash earnings is a combination of jobs and employment. Wages are basically behind core inflation, making this figure very important. Earnings have been encouraging in the past 3 months, with rises of 0.7%-0.8% year over year. The BOJ and the government would certainly like to see it climb above 1% and potentially meet the 2% inflation target. A stronger rise is expected for June: 0.7%.
  6. Housing Starts: Thursday, 5:00.  This housing figure tends to be volatile. After a crash of 15% in May, another free-fall number is expected on the yearly basis: 11.2%.
  7. Final Manufacturing PMI: Friday, 1:35. Markit’s manufacturing PMI is gaining traction for Japan. After a few negative months, the indicator rose above the 50 point mark three months ago. A confirmation of the 50.8 figure is likely now.

* All times are GMT

USD/JPY Technical Analysis

Dollar/yen started the week with a rise from the lows, but it initially met resistance at 101.60 (mentioned last week). It then managed to break this level, but bounced off the 102 level.

Live chart of USD/JPY:




Technical lines from top to bottom

104.80 capped the pair during January and with current ranges, looks distant. 104.10, the high of April 2014 is currently a minor line, but should be watched.

Below, 103.77 provided support for the pair in January and served as a clear separator of ranges. 102.80 was a stubborn peak during February and is the top line of the current trading range.

In the narrower range, 102.30 is weak resistance. 102.00 is a round number that supported the pair several times and is now the pivotal line within the narrowing trading range. 101.60 is weak support in the narrower range.

101.20 provided strong support for the pair during May 2014 and is the low line of support. 100.75 prevented the pair from falling lower during February and is the last backstop before the round number of 100.

100 is not just a round number but also worked as resistance several times in the past.

I remain bullish on USD/JPY

As we’ve seen, the worsening of the geo-political tensions could not stop the pair from rising back towards the 102 level. Yet it seems there is more potential for rises: weakness in Japanese economic numbers together with improving US ones could push the pair higher, even if tensions continue in Ukraine and in the Middle East.

More yen: GBPJPY: 173.80 Viewed as Important Resistance

Further reading:

USD/JPY Forecast July 21-25

USD/JPY Forecast July 21-25

USD/JPY traded within the known ranges once again. Inflation numbers and the trade balance are in the limelight. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The Bank of Japan made no change in policy and left the yen hanging out there. Nevertheless, doubts creeping about the

USD/JPY Forecast July 14-18

USD/JPY Forecast July 14-18

USD/JPY dropped within the range as fear took some hold on the markets. The strengthening of the dollar was outweighed by the advance of the yen . The rate decision is the main event of the week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. Japanese figures haven’t been

USD/JPY Forecast July 7-11

USD/JPY Forecast July 7-11

USD/JPY went back up in the well known range. When will it make a significant move and to which direction? Current account leads the list of indicators. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The closely watched Tankan Manufacturing Index disappointed with a drop to 12

USD/JPY Forecast June 30 – July 4

USD/JPY Forecast June 30 – July 4

USD/JPY traded in a narrow range once again, failing to find a new direction. Will it make a break in the new quarter? The Tankan indices and industrial output are the main events this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. BOJ governor Kuroda defended

USD/JPY Forecast June 23-27

USD/JPY Forecast June 23-27

USD/JPY ticked higher in the range despite US dollar weakness. All in all, no big moves were recorded. The main event this week is the release of inflation numbers. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. Japan’s trade balance surprised with a smaller than expected deficit:

USD/JPY Forecast June 16-20

USD/JPY Forecast June 16-20

USD/JPY got comfortable in the old range. Can it make another break? Trade balance and the meeting minutes from the BOJ are the main events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. Japan grew more than earlier reported. With a strong growth rate of 1.6%, it

USD/JPY Forecast June 9-13

USD/JPY Forecast June 9-13

USD/JPY moved up and returned to the previous range after breaking above downtrend resistance. The upcoming week features a rate decision which is only part of a busy calendar. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. While the BOJ will probably refrain from more stimulus, it

USD/JPY Forecast June 2-6

USD/JPY Forecast June 2-6

USD/JPY ticked lower within the range. Will we see it take a new direction? A relatively wide array of economic indicators awaits us this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The effect of the sales tax hike was clearly seen with the release of

USD/JPY Forecast May 26-30

USD/JPY Forecast May 26-30

USD/JPY dropped to key support but bounced very nicely. A speech from BOJ governor Kuroda and fresh inflation numbers are the key events. What is the next direction for this major pair? Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. Yet again, the Bank of Japan refrained