Technical Outlook: USDJPY corrected towards 112.70 as expected and mentioned in last week’s analysis. Price action posted a strong reversal forming a double bottom near the support level at 112.70. A breakout above 115.355 will signal further upside in USDJPY towards 118.00 as the minimum upside on the double bottom bounce. Therefore, look to buy USDJPY above 115.35 on a potential retest to this level to establish support or on a minor dip. Ahead of the breakout above 115.35, look for USDJPY to post a minor correction towards 113.99 – 113.79 which makes for an ideal buying area with stops just below 112.70 targeting 115.35 and 118.00 offering a tight risk/reward set up.
Fundamental Outlook: Last week, data from Japan showed that inflation rose 0.1% in the month of January as forecasted by economists. This rather slow pace of inflation is likely to push the BoJ to turn more hawkish when it meets on Tuesday. No changes are expected from the Bank of Japan at this week’s meeting but expect some dovish statements to come from the central bank officials. USDJPY will also be influence by the U.S. economic data this week which will include the key FOMC meeting which could bring some volatility to the markets.
Previous USDJPY Weekly Forex Forecast
USDJPY Weekly Forex Forecast – 30th Jan to 3rd Feb 2017 – Bullish
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