USD/JPY Forecast Feb. 12-17

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The Japanese yen reversed directions last week, as USD/JPY posted modest gains. The pair closed the week just above the 113 line. There are just two events on the calendarHere is an outlook for the highlights of this week and an updated technical analysis for USD/JPY.

US numbers were mixed last week, as unemployment claims dropped and beat expectations. However, UoM Consumer Sentiment fell to a 3-month low and missed the estimate. In Japan, there were no major events. Core Machinery Orders and PPI both beat expectations.

Updates:

USD/JPY graph with support and resistance lines on it. Click to enlarge:

  1. Preliminary GDP: Sunday, 23:50. Preliminary GDP is released each quarter. The economy surprised in Q4 with a 0.5% gain, its best showing since Q3 in 2015. The estimate for Q4 stands at 0.3%.
  2. Revised Industrial Production: Tuesday, 4:30. The indicator rebounded in November, posting a gain of 1.5% which matched the estimate. A smaller gain of 0.5% is expected in the December report.

USD/JPY opened the week at 112.64 and dropped to a low of 111.58. The pair then reversed directions and climbed to 113.85 late in the week, testing resistance at 113.80 (discussed last week). USD/JPY closed the week at 113.10.

Live chart of USD/JPY:

Technical lines from top to bottom:

We start with resistance at 117.52.

115.90 is next.

114.55 marked a high point in March 2015.

113.80 is an immediate support level.

112.53 was a cap in April 2016. It remains a weak support line.

110.83 is next.

109.18 marked the start of a rally in September 2008 which saw USD/JPY drop close to the 0.87 level.

107.90 is the final support level for now.

I am bullish on USD/JPY

The US economy remains in good shape, but Donald Trump’s theatrics and lack of an economic plan have led to uneasiness in the markets. Trump’s protectionist stance could sour investors on Japan, which is heavily reliant on exports.

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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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