Technical Outlook: USDJPY broke down below the support level at 116.80 week but just a day later price was seen posting a strong reversal from the 15-day low at 117.23. By Friday’s close, USDJPY was seen moving back into the resistance level of 118.00 – 116.80. Price action in USDJPY has been extremely stubborn with the consolidation near the current levels now into two weeks. On the weekly chart, the hidden bearish divergence continues to remain in play which puts the risks to the downside for USDJPY. Traders can continue to look for short positions in USDJPY within 118.00 – 116.80 price zone targeting 111.275. The bearish bias will be invalidated only on a bullish daily close above 118.00.
Fundamental Outlook: Data from Japan this week will start off with the consumer confidence report on Tuesday which is expected to rise to 41.3. Most of the second tier economic data is relegated to the middle of the week and none of the reports will do much in shaping the sentiment for the Japanese yen. USDJPY showed signs of weakness this week but thanks to Friday’s payrolls report, the dollar managed to reverse the gains. However, the fundamental landscape shows potential signs of changing in the coming weeks which point to a potential correction in USDJPY. Of immediate risk will be the speech by U.S. President-elect Donald Trump who will be holding his first official press conference since winning the elections in November.
Previous USDJPY Weekly Forex Forecast
USDJPY Weekly Forex Forecast – 9th to 13th Jan 2017 – Bullish
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