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Dollar/yen  did not go anywhere fast. The US dollar did make some gains and the pair hit resistance at 113.50, but it then retreated and ended the week in the same place. The rises were driven by good economic data but fresh worries about North Korea supported the yen.

USD/JPY  fundamental  movers

Good US data despite messy NFP


The all-important Non-Farm Payrolls was messy due to the hurricanes: America lost 33K jobs, a drop in the number of employed for the first time since 2010. On the other hand, earnings rose in September and were also revised to the upside, providing a significant piece of good news.

Politics were somewhat on the backburner, at least when it comes to scandals (USD negative) and tax reform (USD positive). Fed speakers that spoke out did not seem worried about low inflation.

In Japan, rumors about yet another North Korean missile test gave a boost to the safe-haven yen. The snap elections are getting closer and newly formed party of Tokyo’s governor is eating away at Abe’s big lead.

Inflation, the Fed minutes and the consumer

Jobs are looking good and inflation remains a “mystery” according to the Fed. We will get an updated snapshot at inflation with PPI and CPI. A look at the American consumer will be provided by retail sales and the University of Michigan’s consumer sentiment measure. And apart from a raft of Fed speakers, the FOMC minutes from the September meeting will provide insights.

See all the main events in the Forex Weekly Outlook

Key news updates for USD/JPY

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USD/JPY Technical Analysis

113.50 was a temporary line of resistance on the way up in July. 113.70 was a separator of ranges in June.

112.20 used to be important in the past. It is closely followed by 111.80, which capped the pair in May. The swing high of early September at 111.30 serves as another point of interest.

Looking down, 110.70 was a separator of ranges in June and remains important.  109.60 was a gap  line in late April, a gap that was never closed.

In June, the pair found support several times at 109.10 and this also works as support.  Further below, the cycle low of 108.10 is of high importance.

The trough of 107.35 seen in early September serves as another cushion on the way down.

USD/JPY  Daily Chart

USD/JPY Sentiment

I remain bearish on USD/JPY

The dollar is up across the board but not against the yen. This is a bearish sign.

Our latest podcast is titled  Good, bad and ugly NFP, Catalan crisis update

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