USD/JPY Forecast Oct. 12-16 – Yen unable to advance despite dollar doldrums

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Dollar/yen showed limited movement for a second straight week. In the upcoming week, the focus will be on Japan’s manufacturing data.

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USD/JPY fundamental mover

In Japan, consumer indicators continued to point downwards. Average Cash Earnings declined for a fifth straight month, with a decline of 1.3% in August. Household Spending fell by 6.9%, marking an 11th straight decline.

In the US, the ISM Services PMI improved to 57.8, up from 56.9 points. The FOMC minutes expressed concern that the lack of a federal fiscal stimulus package could hinder the US recovery, which members said was moving faster than expected. A stimulus bill has been stuck in Congress and it is unlikely that a deal will be reached before the US election. The US dollar showed little reaction to the minutes, as policymakers did not provide any forward guidance on interest rate hikes.

See all the main events in the Forex Weekly Outlook

Key news updates for USD/JPY

Updates:

USD/JPY Technical Analysis

We start at the round number of 108, an important monthly resistance line.

107.29 (mentioned last week) is protecting the 107 level.

106.44 is next.

105.45 is an immediate support level.

104.50 is next.

103.52 has held in support since March.

102.13 is the final support line for now.

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USD/JPY Daily Chart

USD/JPY Sentiment

I am neutral on USD/JPY

With investors continuing to show an appetite for risk, the US dollar and Japanese yen, both of which are safe-haven assets, may face pressure this week.

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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.