USD/JPY Forecast October 14-18 – Yen Returns to Losing Ways

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Dollar/yen continues to show strong movement, climbing 1.4% last week. In the previous week, the yen had gained 1.0%. The upcoming week is not particularly busy. Investors will be keeping an eye on U.S. retail sales.

USD/JPY fundamental movers

Japanese consumer data was mixed. Average cash earnings recorded a second straight decline, with a reading of -0.2%. There was better news from household spending, which improved slightly to 1.0%.

The Federal Reserve published the minutes of its September meeting, when the Fed lower rates by 25 basis points. FOMC members said that the risks to U.S. growth “were tilted to the downside.” Policymakers highlighted concerns about weak global growth, the toll of the U.S-China trade war and low inflation. The markets have priced in yet another rate cut – according to the CME Group, the likelihood of a 1/4 point rate cut in October stands at 75%. U.S. consumer inflation reports for September were a disappointment, missing their forecasts. The headline reading slipped to 0.0%, while Core CPI slowed to 0.1%. Inflation levels remain subdued, well below the Federal Reserve’s target of 2.0%.

See all the main events in the Forex Weekly Outlook

Key news updates for USD/JPY

Updates:

USD/JPY Technical Analysis

We start with resistance at 111.62, which 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 has weakened and is an immediate resistance line.

108.10 switched to a resistance role late in the week, after USD/JPY posted gains.

107.30 has some breathing room in support.

106.61 is next.

105.55 has held in support since late August.

104.65 was last tested in January. It is the final support line for now.

USD/JPY Daily Chart

USD/JPY Sentiment

I am bullish on USD/JPY

Since late August, the U.S dollar has sustained only one losing week against the yen. This shows a lack of interest in the Japanese currency, despite the slowdown in the U.S. Still, any unexpected geopolitical developments could restore the attractiveness of the safe-haven yen.

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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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