The yen struggled in the light of bad economic figures, but did not lose a lot of ground to the greenback. Average cash earnings and Core machinery orders are the major events this week. Here’s an outlook for the Japanese events and an updated technical analysis for USD/JPY. Last week Tankan Manufacturing Index dropped to -9 in the second quarter widely within expectations indicating domestic manufacturing is struggling to recover after March 11 calamities and may require additional aid from the government and the Central Bank. Will the manufacturing sector regain strength in the next quarter? USD/JPY daily chart with support and resistance lines on it. Click to enlarge: Let’s Start: Monetary Base: Sunday, 23:50. The amount of bills in circulation jumped in May by 16.2% from a year ago reaching 114.420 trillion yen after a previous climb of 23.9% indicating a recovery trend in the Japanese economy. A further rise of 14.6% is forecasted. Average Cash Earnings: Tuesday, 1:30. Japanese total cash revenues decreased in May by 1.4% on a yearly base following a previous fall of 0.1%. This is the outcome of the March 11 earthquake and tsunami damaging the manufacturing sector in Japan. Economists foresee further decreases in the months to come. Leading Indicators: Wednesday, 5:00 Japan leading index fell 3.7 points in April to 96.4 after growing by 0.3 points to 103.8 in April a disappointing reading for the Japanese economy. A small drop of 0.4% is predicted. Core Machinery Orders: Wednesday, 23:50. Japanese core machinery orders dropped 3.3% from in April following 2.9% gain in the previous month. Economists expected a 2.0% rise. However this data is considered highly volatile excluding ships and utilities. A climb of 3.1% is expected now. Economy Watchers Sentiment: Friday, 5:00. The business sentiment of companies directly serving improved in May reaching 36.0 points from 28.3 in the previous month as consumption regained strength after March 11 disasters. Although this reading is below the 50 point line it indicates a positive trend in the Japanese economy. Another improvement to 40.1 is forecasted. *All times are GMT USD/JPY Technical Analysis The pair began the week by trading in a narrow range, and then rose to challenge the 81.33 line (discussed last week). From there, it traded in a choppy manner and remains a frustrating pair… Technical lines, from top to bottom: 83.30 is a weak line that capped the pair just before the disaster at the beginning of March and also working as support a few months earlier. 82.87 was the trough before the BOJ intervention in September 2010 and also played an important role in recent weeks as the peak of a recovery attempt. 82.20 capped the pair in a very stubborn way a few weeks ago and remains a strong line now. 81,33 proved to be a distinctive line separating ranges – it was a double top about a month ago and and regained its strength just now. 81.06 was a weak line of support in May and slowed down a second move upwards. 80.70 capped the pair several times in recent weeks and remains a strong and immediate line of resistance. The round number of 80 remains an important line. The pair didn’t fall below it now. 79.75 is the historic low of 1995 and played a critical role when the pair collapsed in March. It worked nicely recently and is closely watched by the authorities. It’s followed by 79.16 which is minor resistance as well. The last line is 78.27 – both were significant before the big intervention. I remain bullish on USD/JPY. As we’ve seen with the Tankan Manufacturing Index, the economy in Japan is weak. On the other side of the Atlantic, production is picking up, and QE2 is now history. 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 GBP/USD (cable), look into the British Pound forecast. For the Australian dollar (Aussie), check out the AUD to USD forecast. For the New Zealand dollar (kiwi), read the NZD forecast. For USD/CAD (loonie), check out the Canadian dollar For the Swiss Franc, see the USD/CHF forecast. Anat Dror Anat Dror Anat Dror â€“ Senior Writer I conceptualize, design and create multi-lingual websites. Apart from the technical work, my projects usually consist of writing content for these sites in English, French and Hebrew. In the past, I have built, managed and marketed an e-learning center for language studies, including moderating a live community of students. Iâ€™ve also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. MajorsUSD JPY Forecast share Read Next USD/CAD Outlook – Jul 4-8 Anat Dror 10 years The yen struggled in the light of bad economic figures, but did not lose a lot of ground to the greenback. Average cash earnings and Core machinery orders are the major events this week. Here's an outlook for the Japanese events and an updated technical analysis for USD/JPY. Last week Tankan Manufacturing Index dropped to -9 in the second quarter widely within expectations indicating domestic manufacturing is struggling to recover after March 11 calamities and may require additional aid from the government and the Central Bank. Will the manufacturing sector regain strength in the next quarter? 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