USD/JPY traded in range and eventually ended the week lower, as worries about the global economy pushed traders to the safe haven yen. GDP and Tertiary Industry Activity are the highlight of this week. Here’s an outlook for the Japanese events and an updated technical analysis for USD/JPY. Last week, the Bank of Japan continued its nonintervention policy claiming things are picking up moderately but also warned about the European debt crisis and its effects on Japan’s economic recovery. Interest rates remained unchanged at between zero and 0.1%. Will the economy manage to strengthen further without the BOJ intervention? Updates: Preliminary GDP dropped to 0.3%, below the estimate of 0.6%. Preliminary GDP Price Index also disappointed, posting a decline of -1.1%. The market forecast stood at -0.8%. The BOJ will release its Monetary Policy Meeting Minutes later on Monday. USD/JPY is trading in a narrow range, as the pair traded at 0.7828. In its Monetary Policy Meeting Minutes, the BOJ raised expressed concern about the weak global economy and simmering debt crisis in Europe. The central bank BOJ remains under pressure to ease monetary policy. Tertiary Industry Activity rose 0.1%, exceeding the market forecast of a o.3% decline. The yen was down slightly, as USD/JPY was trading at 78.58. The yen lost ground after strong US Retail Sales data. USD/JPY was testing the 79 line, and was trading at 0.7898. The yen lost ground as speculation rises that the BOJ may intervene to help economic growth. USD/JPY was trading at 79.23, its highest level in one month. USD/JPY daily chart with support and resistance lines on it. Click to enlarge: Prelim GDP: Sunday, 23:50. Japan’s preliminary reading of GDP showed a 1.0% expansion rate in the first quarter, following a flat reading in the fourth quarter of 2011. This better than expected figure was 0.1% higher than predicted by analysts and eventually was revised further up to a 1.2% growth rate. This encouraging reading indicates recovery is on the right track. Monetary Policy Meeting Minutes: Monday, 23:50. BOJ members were more optimistic on their last meeting on June indicating Japan’s economy is picking up amid a firm domestic demand. However Japan still faces many downside risks such as deflation and global uncertainty amid the European debt crisis. The members agreed the bank should intervene in case the European risks materialize. They have also upgraded their assessment of the domestic economy. Tertiary Industry Activity: Monday, 23:50. Service sector activity improved in May by 0.7% topping analysts’ predictions of a 0.2% gain and following a 0.2% contraction in April. Improvement was demonstrated in wholesale and retail trade, medical health care and welfare, information and communications, amusement services, technical services, and compound services. USD/JPY Technical Analysis Dollar/yen traded between 78.15 to 78.80 throughout the week, and closed on the lower side. Technical lines from top to bottom Note that some lines have changed since last week. 82.87 is a veteran line – that’s where the BOJ intervened for the first time back in 2010. 81.80 capped the pair in April. 81.43 is stronger after serving as resistance for a recovery attempt. 80.60 provided support for the pair around the same time, and served as a bouncing spot for the next moves. It proved its strength as resistance in June 2012, more than once. 80.20 separated ranges in May 2012 and remains another barrier after 80 on the upside. The round number of 80 is psychologically important, even though it was crossed several times in recent months. It is stronger now. 79.70 was a cap was seen in June 2012. It proved its strength as resistance once again in July 2012. 79.10 was a cushion for the pair several times in June and also back in May 2012. This role continues in July. Close by, 78.80 proved its strength as resistance in August 2012 and is at the top of the range. The round number of 78 is now stronger support after being the bottom of the range. 77.50 was the bottom border of a range the pair had at the end of 2011. It is followed by 77, which is only minor support. 76.60 was a cushion for the pair at the beginning of the year and is rather strong. 76.26 is the next line on the downside after working as a support quite some time ago. I am neutral on USD/JPY. Positive US data helps the US dollar, but the ongoing European and Chinese worries help the safe haven yen. More limited range trading is likely for another summer week. 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 forecast For the Swiss Franc, see the USD/CHF forecast. Anat Dror Anat Dror Anat Dror 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. I've also worked as a community organizer Anat's Google Profile View All Post By Anat Dror MajorsUSD JPY Forecast share Read Next GBP/USD Outlook Aug. 13-17 Kenny Fisher 10 years USD/JPY traded in range and eventually ended the week lower, as worries about the global economy pushed traders to the safe haven yen. GDP and Tertiary Industry Activity are the highlight of this week. Here's an outlook for the Japanese events and an updated technical analysis for USD/JPY. Last week, the Bank of Japan continued its nonintervention policy claiming things are picking up moderately but also warned about the European debt crisis and its effects on Japan's economic recovery. Interest rates remained unchanged at between zero and 0.1%. Will the economy manage to strengthen further without the BOJ intervention? 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