USDJPY Weekly Forex Forecast – 30th July to 3rd August 2018
The markets look to a busy week this coming week which marks the end of July. Economic data kicks off with the Bank of Japan set to hold its monetary policy meeting. According to some rumors, the BoJ is expected to announce a possible change to its interest rate targets. The week ahead will also see the release of the core PCE price index data from the U.S. the report comes ahead of the September monetary policy meeting. The start of August will trigger the release of the main important fundamentals which includes the ISM manufacturing PMI and Friday’s payrolls report. The FOMC will be holding its placeholder monetary policy meeting on the 1st of August. No changes are expected to interest rates at this week’s meeting with investors expecting to see a rate hike in September. Data from the Eurozone over the week covers the flash inflation estimates for the month of July. The economic calendar from Switzerland is relatively quiet this week.
Chart set up: After the USDJPY currency pair broke to the downside of the rising price channel, the currency pair has moved into a sideways range. While there is scope for a downside decline in price action, we expect to see the breakout occurring in either direction.
Key support/resistance levels:
Support: 110.75; Resistance: 111.55
The newly established support and resistance levels form the upper and lower bounds for the USDJPY. If price action breaks out from this level could we could expect to see a strong retracement above 111.55. This could push the currency pair toward 112.27 to retest and establish the resistance level. To the downside, a break down below 110.75 could signal a break towards 109.50. In the near term the currency pair could rebound off the current levels to test the breached support at 111.27 where resistance is now expected to be established.
For the week ahead, the USDJPY currency pair is expected to be bearish.
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