USDJPY Weekly Forex Forecast – 15th to 19th Oct 2018
The markets move into the third week of October with economic data continuing to lay the picture for the third quarter economic performance. The data from the Eurozone will cover mostly the business and economic sentiment. But this will shed light on how the economy is shaping up. Overall economic data is relatively quiet especially from Switzerland and Japan. The national CPI report from Japan will be coming out over the week. The Eurozone will report its inflation figures for the month of September
Meanwhile, the FOMC will be releasing its meeting minutes. No surprises are expected as the central bank is expected to push with one more rate hike in December. Economic data from the U.S. will include the retail sales report which is forecast to rise sharply on a month over month basis. Other data over the week includes forward looking indicators and housing market reports. The flows will of course be determined by the general market sentiment. The U.S. dollar continues to remain on the forefront. Investors will be looking to the data on the back of last week’s sell off.
Chart set up: The USDJPY currency pair posted strong declines last week. This came as price action failed to hold near the newly established support level. The break below the support level at 113.58 quickly sent price action surging lower.
Key support/resistance levels:
Support: 111.75; Resistance: 112.74
Price action in the USDJPY currency pair saw a strong correction. The declines came right after the currency pair failed to hold out near the potential support level at 113.58. This sent the currency pair plunging past the next support level at 112.74. By Friday, the USDJPY closed just above the next main support at 111.75. In the short term, any short term rebound will be tested at the resistance level of 112.74. This could potentially keep any corrections in check. In the event that the USDJPY breaks out above 112.74, we expect the next main resistance at 113.58 to come into the picture.
For the week ahead, the USDJPY currency pair is expected to be slightly bullish.
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