Technical Outlook: USDJPY has been trending lower last week but price action is still steadily above the 114.00 handle. Therefore, we can expect to see some near term consolidation within 116 and 114 price levels. However, the bias is clearly to the downside as USDJPY has shown signs of topping out near the 118.00 handle. On the daily chart, the Stochastics is currently near the oversold levels, so a short term retracement cannot be ruled out. Look for price action to retrace back to 116.80 - 116.50 region before the bearish declines resume once again. Support is seen at 111.275 which could be the initial test to the downside, followed by a move to 106.90 - 106.58. Fundamental Outlook: The economic calendar from Japan this week is light with only second tier data involving the tertiary industry activity, preliminary machine tools and revised industrial production data. Most of the focus will be on the U.S. dollar especially with the yen showing signs of strength last week. Besides economic data from the U.S. it is likely to come down to the market sentiment and the risk appetite which could keep USDJPY a bit volatile this week. The yen could also be influenced by Thursday's ECB meeting. Traders should bear in mind that Fed Chair, Janet Yellen will be speaking twice this week. Previous USDJPY Weekly Forex Forecast

USDJPY Weekly Forex Forecast - 16th to 20th Jan 2017 - Bearish