Fundamental view:

USD/JPY showed a mixed trend in the past week. Twin specters of unemployment and a consumer recession in the United States were unable to dislodge the dollar from its recent gains. American data in the New Year has detailed the impact of the renewed business closures in California, the largest state economy, and modified restrictions in cities like New York which has again shuttered indoor restaurants.

US CB Employment Trends Index on 11^th January and Japan BoJ M2 Money Stock y/y & US CPI m/m on 13^th January created uptrend for the pair whereas Japan Goods Trade Balance on 12^th January and US Import Price Index yearly report on 14^th January created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are US TIC Net Long-Term Transactions at Jan 19, BoJ Monetary Policy Statement, US Building Permits, Philadelphia Fed Manufacturing Index, US Initial Jobless Claims at Jan 21, Japan Markit Manufacturing PMI and US Markit Manufacturing PMI at Jan 22.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.29% higher than the previous week. Maintaining high at 104.40 and low at 103.53 showed a movement of 87 pips.

In the upcoming week we expect USD/JPY to show a bearish trend. The currency pair is trading above the 100 Simple Moving Average and the MACD trades to the downside. A solid breakout below 103.40 may open a clean path towards 103.03 and may take a way down to 102.53. Should 104.27 prove to be unreliable resistance, the USDJPY may raise upwards 104.77 and 105.15 respectively. In H4 chart, Formation of diamond pattern breakout indicates reversal of the trend creating prospects of a bearish trend Along with a shooting star formation braces our expectation.