Fundamental view:

The USD/JPY showed a bearish trend in the previous week. The dollar has eased amid cooling expectations for higher rates in the US, which sent stocks up and US Treasury yields lower. The Bank of Japan published the Minutes of its latest meeting, which brought no surprises. The central bank will maintain its quantitative easing, despite some members expressing concerns about its effects on the financial system in the long run. Also, local news agencies reported that Tokyo’s state of emergency due to corona virus will be extended until the end of May.

US Factory Orders monthly report on 4^th May and US Initial Jobless Claims 4-Week Average on 6^th May framed bullish trend whereas US ISM Manufacturing PMI on 3^rd May and US EIA Cushing Crude Oil Stocks Change on 5^th May framed bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are BoJ Summary of Opinions, US JOLTS Job Openings at May 11, Japan Adjusted Current Account, US Core CPI monthly report, US EIA Crude Oil Stocks Change at May 12, US Initial Jobless Claims at May 13, US Retail Sales monthly report and Fed Industrial Production yearly report at May 14.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.30% higher than the previous week. Maintaining high at 109.70 and low at 108.34 showed a movement of 136 pips.

In the upcoming week we expect USD/JPY to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 108.05 may open a clean path towards 107.52 and may take a way down to 106.69. Should 109.40 prove to be unreliable resistance, the USDJPY may raise upwards 110.23 and 110.76 respectively.  In H4 chart, Formation of rounding top pattern indicates reversal of the trend creating prospects of a bearish trend Along with a shooting star formation braces our expectation.