Fundamental view:

USD/JPY has shown a bullish trend last week. Even tough the US dollar was weak, it portrayed a uptrend against the struggling yen.Dallas Fed President Robert Kaplan showed readiness on considering tapering the bank’s $120 billion/month bond-buying scheme as a response to the Delta COVID-19 variant and Bank announced that t its Jackson Hole Symposium would be held virtually. These were the major reasons behind the US dollar weakness.  In Japan, 33 of the nation’s 47 prefectures are under some type of emergency measures set to last until September 12. Whereas Tokyo has been under restriction since July 12 and cases of the Delta variant have continued to increase. Prime Minister Yoshihide Suga said he hopes to achieve a 60% vaccination rate sometime in September. About 40% of the population which are mostly the elderly, are currently protected.

Japan Markit Manufacturing PMI on 23rd August and US EIA Crude Oil Stocks Change on 25th August created uptrend whereas US Markit Services PMI on 23rd August and US Michigan Consumer Expectations on 27th August created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Unemployment Rate at Aug 30, US CB Consumer Confidence Index at Aug 31, US ADP Nonfarm Employment Change, US ISM Manufacturing PMI at Sep 01, BoJ Board Member Kataoka Speech, US Initial Jobless Claims at Sep 02 and US Nonfarm Payrolls at Sep 03.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.04% higher than the previous week. Maintaining high at 110.27 and low at 109.41 showed a movement of 86 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 110.28 may open a clean path towards 110.70 and may take a way up to 111.14. Should 109.42 prove to be unreliable support, the USDJPY may sink downwards 108.98 and 108.56 respectively. In H4 chart, Formation of bullish bat pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish engulfing formation braces our expectation.