Fundamental view:

The US dollar has rallied a bit during the week to reach towards the ¥105 level. However, the market has pulled back significantly from there, which shows a strong downtrend. The waning psychological impact of the pandemic is evident in the frequent market responses to US economic data and positive COVID-19 news. However, the barrier to a new scenario in the currency markets is the state of the pandemic in the United States. Until the number of diagnoses starts to decline and the series of new, albeit economically limited, closures abate, it will be difficult for traders to wholly abandon the safety-trade to the yen or countenance the US economy.

US Richmond Manufacturing Index & CB Consumer Confidence on 24^th August and Japan BOJ Core CPI yearly report on 25^th Aug created bearish trend whereas US Flash Manufacturing PMI & Flash Services PMI  on 23^rd August and Japan SPPI on 25^th August created a bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Unemployment Rate, OPEC Meetings at Nov 30, Japan Markit Manufacturing PMI, US ISM Manufacturing PMI, Fed Chair Powell Testimony at Dec 01, US ADP Nonfarm Employment Change at Dec 02, US ISM Non-Manufacturing PMI at Dec 03, and US Nonfarm Payrolls at Dec 04.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.35% lower than the previous week. Maintaining high at 104.76 and low at 103.68 showed a movement of 108 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 104.64 may open a clean path towards 105.23 and may take a way up to 105.71. Should 103.56 prove to be unreliable support, the USDJPY may sink downwards 103.08 and 102.48 respectively. In H4 chart, Formation of symmetrical triangle breakout indicates reversal of the trend creating prospects of a bullish trend Along with a bullish harami formation braces our expectation.