USD/JPY posted modest losses last week, as the pair closed slightly below the 120 level. The upcoming week is a quiet one, with just three events. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
The yen took advantage of some weak US numbers, highlighted by poor retail sales and weak manufacturing data. There were no surprises from the BOJ policy minutes, as the central bank maintained its aggressive easing program.
do action=”autoupdate” tag=”USDJPYUpdate”/]
USD/JPY graph with support and resistance lines on it:
- Trade Balance: Tuesday, 23:50. Japan’s trade deficit showed little movement in August, coming in at JPY -0.36 trillion, which was within expectations. The markets are expecting a smaller deficit in September, with an estimate of JPY -0.07 trillion.
- All Industries Activity: Wednesday, 4:30. The indicator posted a small gain of 0.5% in July, which was within expectations. The markets are braced for a decline in the August reading, with an estimate of -0.1%.
- Flash Manufacturing PMI: Friday, 1:35. In recent months, this PMI has hovered closed to the 50-level, which separates contraction from expansion. The indicator dipped in September to 50.9 points, shy of the estimate of 51.3 points. The estimate for the October report stands at 50.6 points.
* All times are GMT
USD/JPY Technical Analysis
USD/JPY opened the week at 120.19. The pair quickly touched a high of 120.22, and then reversed directions, slipping to a low of 118.05, testing support at 118.50 (discussed last week). USD/JPY closed the week at 119.39.
Live chart of USD/JPY: [do action=”tradingviews” pair=”USDJPY” interval=”60″/]
Technical lines from top to bottom:
The round number of 123, was a swing low in July and remains of importance.
121.50 was the high in September and a key resistance line.
120.40, which was a swing low in July, has switched to resistance. It is a weak line.
118.50 is an immediate support level.
116.90 supported dollar/yen early in the year.
115.90 is the final support level for now.
I am bullish on USD/JPY
The Fed may not make any moves until 2016, but monetary divergence will continue to favor the dollar, as the BOJ contemplates further easing to kick-start a limping economy, which continues to lag well behind the US economy.
In our latest podcast we analyze Varoufakis’ 4 problems and 4 solutions, and more
Follow us on Sticher or on iTunes
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.
Share
