Technical Outlook: The USDJPY currency pair reached the initial target of 108.14 as mentioned in the monthly report for April. For the month ahead, we see that the gains extended strongly to test a two month high near 109.52 before the currency pair was seen settling lower. The decline coincides with an exhaustion to the rally and the current declines could be seen pushing USDJPY lower. This correction is likely to see the currency pair retesting the support level at 108.14. Establishing support here and a potential reversal could set the stage for the USDJPY currency pair to extend the gains to the final target of 111.07 – 110.81 level of resistance.
Fundamental Outlook: The Japanese yen was seen easing back after starting the year on a firm footing. Sentiment in the global markets were reflected by the broad based strength in the Japanese yen. For one, investors continued to remain bullish on the BoJ as they expected the central bank to start tightening. However, the BoJ’s meeting in the last week of April showed that central bank officials removed the inflation target time frame. This basically means that BoJ officials can now have further scop for policy adjustment. At the same time, this could also keep the markets in check. The weakness in the Japanese yen is of course a welcome sign amid global trade wars.
Previous USDJPY Monthly and Weekly Forex Forecast
USDJPY Monthly Forex Forecast for May 2018
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