USDJPY Weekly Forex Forecast – 17th to 21st Sept 2018
The week ahead will see a mix of both economic and monetary policy drivers pushing the markets. In the Eurozone the final inflation figures will be due on Monday for the month of August. The main highlight of the week will be the Bank of Japan’s monetary policy meeting that is due on Wednesday. No changes are expected from the BoJ which tweaked its policy just recently by pushing back the inflation target timeline. This is followed up a day later by the Swiss National Bank’s monetary policy meeting. The SNB is expected to keep the 3-month LIBOR unchanged at this week’s meeting as well. However, we can anticipate some changes in the near term especially with the ECB tightening its policy. From the U.S. the economic data covers mostly the housing markets. Given the recent decline in home sales the housing starts and building permits will give a glimpse into the construction activity in the sector.
Chart set up: The USDJPY currency pair broke the resistance level of 111.55 last week. Price action is seen rising gradually to the next main resistance level of 112.27. Any declines could be stalled near the support at 111.55. A retest of support at this level which served as resistance could indicate further gains.
Key support/resistance levels:
Support: 111.55; Resistance: 112.77
The USDJPY currency pair closed last week with strong gains. Price action on Friday managed to close with a bullish engulfing pattern. This indicates a near term pullback ahead of price testing the next resistance level of 112.27. A decline back to 111.55 to form support could validate this view.The Bank of Japan’s monetary policy meeting will be the main catalyst for the USDJPY currency pair this week. The global risk sentiment could also determine the flows in the currency pair. For the week ahead, the USDJPY currency pair is expected to be slightly bullish.
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