USD/JPY gained over 100 points last week and broke above the symbolic 120 level. The pair closed at 120.13. The upcoming week is a quiet one, with just four events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
[do action=”autoupdate” tag=”USDJPYUpdate”/]Japanese data was uneventful last week, with no major events. In the US, JOLTS Job Openings improved and the 4-week jobless claims was the lowest since 2000.
USD/JPY graph with support and resistance lines on it:
- Core Machinery Orders: Monday, 00:50. This important manufacturing indicator tends to show strong fluctuation. The indicator came in at -1.7% in January, but this beat the estimate of -3.9%. The markets are expecting another decline in the February release, with an estimate of -2.6%.
- Monetary Policy Meeting Minutes: Monday, 00:50. The minutes will provide details of last week’s policy meeting. The BOJ continues its aggressive monetary policy, so the minutes are not likely to shake up USD/JPY.
- Revised Industrial Production: Wednesday, 5:30. This minor event posted a strong gain of 3.7% in January, within expectations. The markets are bracing for a sharp downturn in the February report, with the estimate standing at -3.1%.
- Consumer Confidence: Friday, 6:00. Consumer Confidence is closely monitored by market analysts, as improved consumer confidence usually translates into stronger consumer spending, a key component of economic growth.
* All times are GMT
USD/JPY Technical Analysis
USD/JPY started the week at 118.86 and quickly dropped to a low of 118.72. It was all uphill for the dollar from there, as the pair climbed to a high of 120.74, as resistance held firm at 121.39 (discussed last week). USD/JPY closed the week at 120.13.
Live chart of USD/JPY: [do action=”tradingviews” pair=”USDJPY” interval=”60″/]
Technical lines from top to bottom:
We begin with resistance at 124.16. This line marked the start of a yen rally in June 2007, which saw USD/JPY drop to the 96 level.
122.19 is the next resistance line.
121.39 remains a strong resistance line. The line held firm as the pair showed some strength late in the week.
119.88 has switched to support role as USD/JPY posted strong gains. This line is currently a weak line and could see further action early in the week.
117.94 has strengthened in support.
116.82 has remained intact since mid-January.
115.85 is the final support line for now.
I am bullish on USD/JPY
US employment data rebounded nicely last week following the dismal NFP report, and market sentiment remains high on the US economy. The BOJ is holding course with its aggressive monetary policy, which continues to weigh on the yen. So we could see the pair begin to pull away from the 120 level.
In this week’s podcast, we discuss: USDown or greenback comeback? And also touch other topics:
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Further reading:
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- For the kiwi, see the NZDUSD forecast.
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