Technical Outlook: The USDJPY broke down sharply and the failure to post a rebound on the hidden bullish divergence saw price break down lower to a 3-week low. Price action has formed a bearish flag in the process with minor resistance seen forming at 111.65.A break down below 110.79 will trigger further downside with the minimum downside target seen at 108.945. However note the strong support level formed at 110.14 - 110.04 which could stem the declines. A rebound off this level will keep USDJPY range bound within 111.65 resistance level. Fundamental Outlook: A rather quiet week from Japan will see the release of the trade balance numbers and flash manufacturing PMI. Last week, Japan's quarterly GDP report was released which showed that economic activity advanced driven by an increase in consumption and exports. Japan's growth in the first quarter of 2017 rose 2.2% on an annualized basis which marked five consecutive quarterly periods of expansion. It was also higher than the median forecasts of 1.7%. The week ahead will see the inflation figures coming out later the week, but consumer prices are expected to remain subdued. Previous USDJPY Weekly Forex Forecast

USDJPY Weekly Forex Forecast - 22nd to 26th May 2017