USDJPY Weekly Forex Forecast – 18th to 22nd Dec 2017

Technical Outlook: The USDJPY currency pair was seen breaking down below the 113.00 handle. The failure to continue higher from the previous highs formed suggests that the downside price action is imminent. In the near term USDJPY could be seen attempting to retest the breached support level of 113.00. Establishing resistance here could signal a downside correction in price. We expect that the declines will continue towards the 111.76 level of support.

Fundamental Outlook: Economic data from Japan see’s a quiet week ahead leaving only Thursday’s BoJ monetary policy meeting standing out. The Bank of Japan is expected to keep monetary policy unchanged at -0.10% while also retaining its QQE purchases. The BoJ is expected to maintain the status quo as the central bank continues to struggle to lift inflation to its 2% inflation target rate. The BoJ will also be giving its forward guidance on when it could reach the inflation target. However, for the most part, the central bank monetary policy meeting is expected to be a non-event. Besides the BoJ meeting, the Japan’s all-industries activity data will be the only other data point in focus amid a quiet week.

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