USD/JPY Forecast Aug. 10-14 – Will US consumer data shake up the sleepy yen?

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Dollar/yen showed little movement for a second consecutive week. On the fundamental front, Japanese releases are all second-tier, which is unlikely to impact on the movement of USD/JPY. In the US, the focus will be on the US consumer, with the release of CPI and retail sales.
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USD/JPY fundamental mover

Japan’s GDP posted a third straight decline in GDP, with a reading of 0.6% in Q2. Two consecutive declines indicate recession. Tokyo Core CPI improved to 0.4%, up from 0.2% beforehand. Other consumer data continued to point downward. Average Cash Earnings fell by 1.7%, while Household Spending declined by 1.2%. Both of these readings beat the forecasts.

There was positive news from the US manufacturing sector, as the ISM Manufacturing PMI improved to 54.2 in June, up from 53.6 beforehand. A reading above the 50-level points to expansion. US employment data was stronger than expected. Nonfarm payrolls slowed to 1.76 million, down from 4.8 million beforehand. Still, this beat the forecast of 1.53 million. Wage growth beat the estimate of -0.5% with a gain of 0.2%, after two straight declines. As well the unemployment rate fell from11.1% to 10.2%, beating the estimate of 10.5%.

See all the main events in the Forex Weekly Outlook

Key news updates for USD/JPY

Updates:

USD/JPY Technical Analysis

109.73 (mentioned last week) is protecting the 110 level, which has psychological significance.

108.30 has provided resistance since early June.

107.22 is next.

106.05 was tested throughout the week.

105.13 is providing support.

104.29 is next.

103.52 was last tested in early March.

102.27 is the final support line for now.

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USD/JPY Daily Chart

USD/JPY Sentiment

I remain neutral on USD/JPY

The US dollar continues to struggle to find its feet, as the US struggles with the Covid-19 pandemic. At the same time, there are signs of recovery in the US, such as employment and manufacturing.

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About Author

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.

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