Technical Outlook: USDJPY closed with a doji candlestick pattern on Friday, coming after Thursday’s strong rally. Price is however likely to continue to the upside, but a confirmation is needed with a daily close above Friday’s high of 113.85. Watch for a near term decline to 112.50 region following which USDJPY should be pushing higher with the potential break of the falling trend line on the 4-hour chart. This will see the upside momentum push USDJPY towards the first resistance level of 114.00. A breakdown below 112.50 will see USDJPY remain supported, but prices could turn sideways between 112.50 and 112.00.
Fundamental Outlook: A quiet week in Japan will see the revised industrial production figures coming out. Economists polled expected to see an increase of 0.5% on a month over month basis. However, the USDJPY is more likely to be influenced by the Japanese PM’s visit to the U.S., where he is expected to stay over the weekend. Given the fact that the U.S. administration had some tough words for Japan for interfering in the currency markets to give it a competitive edge, the focus will be on any press conference scheduled by both the leaders. This is quite likely to move the markets, especially on Monday’s open.
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USDJPY Weekly Forex Forecast – 13th to 17th Feb 2017 – Bearish