Technical Outlook: The USDJPY currency pair was seen testing fresh highs last week as price briefly rallied to highs above 109.96. However, the rally faded as price action quickly posted declines. The close below 109.14 and a prompt retest of this level indicates that the upside momentum may be slowing. In the near term, USDJPY could be seen consolidating at the currently levels. Unless we see a strong close above 109.14 and a potentially new high being formed, the USDJPY currency pair could post a corrective decline toward 107.77 - 107.63 level where support is most likely to be tested. Fundamental Outlook: After a rather quiet week from Japan, the week ahead will starts off with the household spending data. The household spending data will give more details into the spending outlook on the consumer side. This marks an important data point that could feed into how inflation progressed in April. The average cash earnings rate is also another important economic release that could influence the inflation outlook for Japan. Most of the other economic releases include minor data points such as the current account and the preliminary machine order tools.

USDJPY Weekly Forex Forecast - 7th to 11th May 2018