Technical Outlook: The USDJPY currency pair advanced strongly last month with price action converging with the resistance level established around 111.07 - 110.81 level. The retest of this resistance level is expected to see some downside in prices. This could lead to a correction in prices toward 108.61. The breakout from the rising price channel could seee USDJPY correcting to the 108.61 level which marks the 38.2% Fibonacci retracement. Further declines could push USDJPY lower to the 61.8% retracement level at 107.09. Alternately, a breakout above the resistance level could keep the USDJPY on track for further gains. Fundamental Outlook: The month ahead for the Japanese yen is unlikely to bring and major changes to monetary policy. The Bank of Japan had announced at its monetary policy meeting in May that it was removing the timeframe on achieving the 2% inflation target rate. This means that the BoJ has more room to steer its monetary policy. With consumer prices staying stubbornly low, the removal of the time frame will put the markets in a speculative mode on the next move from the central bank. The BoJ meeting is due on June 15th and it is likly that the central bank will not make any major changes. The recent weakness in the first quarter GDP data is also likely to weigh on policy makers to take a more cautious approach when setting its monetary policy. Previous USDJPY Monthly and Weekly Forex Forecast

USDJPY Monthly Forex Forecast for June 2018