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Dollar/yen reversed directions last week, posting modest losses. Investors are keeping an eye on Japanese trade balance and Flash Manufacturing PMI.

USD/JPY fundamental movers

In Japan, Preliminary GDP for Q3 slipped to 0.1%, shy of the estimate of 0.2%. This was weaker than the Final GDP reading for Q2, which was 0.3%.

In the U.S., last week’s highlights were consumer inflation and spending reports. CPI improved to 0.4%, above the estimate of 0.3%. This was the strongest monthly gain since March. The core reading ticked higher to 0.2%, up from 0.1%. This matched the estimate. Retail sales reports were mixed. Retail sales rebounded with a gain of 0.3%, up from -0.3% a month earlier. This beat the estimate of 0.1%. The core reading improved to 0.2%, up from -0.1%. However, it missed the forecast of 0.3%.

See all the main events in the  Forex Weekly Outlook

Key news updates for USD/JPY


USD/JPY Technical Analysis

We start with resistance at 112.25.

111.62 was last active in April. 110.62 is next.

109.73 has held in resistance since the end of May. 109.35 is close by.

108.70 remains relevant. Currently, it is a weak support level. 108.10 is next.

107.30 (mentioned last week) switched to support in early October.

106.61  is next.

105.55 has held in support since late August. It is the final support level for now.

USD/JPY Daily Chart

USD/JPY Sentiment

I remain bullish on USD/JPY

There is cautious optimism that the U.S. and China could reach a trade deal shortly. Any agreement which would curb the nasty trade war would boost risk appetite and dampen sentiment for the Japanese yen.

Further reading:

Safe trading!