Fundamental view:

The US dollar has fallen against the Japanese yen during the course of the week. The dollar was trading low due to weak US statistics and stationary monetary policy, there was no compelling reason to buy dollar whereas yen also seem to be unattractive with the absence of positive data. Comments from Japanese Prime Minister Yoshihide Suga on Friday came which stated Delta variant of the coronavirus is spreading quickly among the elderly struck a cautionary note on the country’s immediate economic future and US central bank left its monetary policy unchanged as expected.

Japan Coincident Index on 28th July & Japan Retail Sales yearly report on 30th July created uptrend whereas US New Home Sales on 26th July & US Initial Jobless Claims on 29th July created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Markit Manufacturing PMI, US ISM Manufacturing PMI at Aug 02, Japan 10-Year JGB Auction at Aug 03, US ADP Nonfarm Employment Change, US ISM Non-Manufacturing PMI at Aug 04, US Initial Jobless Claims at Aug 05 and US Nonfarm Payrolls at Aug 06.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was same as the previous week. Maintaining high at 110.58 and low at 109.35 showed a movement of 123 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 109.14 may open a clean path towards 108.63 and may take a way down to 107.91. Should 110.37 prove to be unreliable resistance, the USDJPY may raise upwards 111.09 and 111.60 respectively. In H4 chart, Formation of inverted cup and handle pattern indicates reversal of the trend creating prospects of a bearish trend Along with a bullish shooting star formation braces our expectation.