Technical Outlook: USDJPY saw one of the strong weekly gain as price posted a near 8-day rally. As noted in last week’s analysis, USDJPY extended gains to 104.00 resistance level before turning lower by Friday’s close. The strong rally is expected to see a near term pullback and in the coming week we could expect a weaker USDJPY with a modest retracements back to 103.65 level. Initial support is seen at 102.56 – 102.46 region which could offer a modest rebound, but if USDJPY fails to breakout above 104.00 on this rebound, expect the support level to give way, leading to a downside risk towards 101.70 – 101.45 support level. Fundamental Outlook: There is not much to look at as far as economic data from Japan is concerned. Also, it is a short week for the yen with Japan markets closed on Monday. Current account data and economy watchers sentiment will be the releases of interest over the week although it is unlikely to expect much of a reaction from the yen during these releases. The speech by Fed Chair Janet Yellen will be the one to watch out for on Friday as any comments on potential rate hikes in November or December could spark another strong rally in USDJPY. USDJPY is at about the uptrend line now. We expect a bounce off the trendline. If price breaks through the trendline, then perhaps a new trend is forming. Stochastics is hinting there might be more downside and the bear are still not ready to take a back seat. Well, we will see if the trendline holds...

USDJPY Weekly Forex Forecast - 10th to 14th Oct 2016 - BULLISH