Fundamental view:

The US dollar initially pulled back during the starting and then rallied against the yen at the end of the week. The sharp rise in real interest rates in the US (yield -inflation) has been the largest factor in the ascent of the USD/JPY this year. Even though the dollar overall has had a nondescript two months, the Dollar Index is up a paltry 0.7% since December 31, the USD/JPY has gained 3.1% since the beginning of the year. There has been no indication from the US Federal Reserve that it is concerned about the increase in medium to long-term yields, even as Chairman Jerome Powell promises to keep rates low until the recovery is complete.

The major economic events deciding the movement of the pair in the next week are US HPI y/y , S&P/CS HPI Composite-20 n.s.a. monthly report on 23^rd Feb and US EIA Crude Oil Stocks Change & US EIA Heating Oil Stocks Change on 24 th Feb created bearish trend whereas US Chicago Fed National Activity Index on 22^nd Feb and Japan BoJ Trimmed Mean Core CPI y/y & Japan BoJ Weighted Median Core CPI yearly report on 24^th Feb created bullish trend for the pair.

USD/JPY Weekly outlook:

 Technical View:

Last week’s high was 0.44% higher than the previous week. Maintaining high at 106.69 and low at 104.92 showed a movement of 177 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 107.16 may open a clean path towards 107.81 and may take a way up to 108.93. Should 105.39 prove to be unreliable support, the USDJPY may sink downwards 104.27 and 103.62 respectively. In H4 chart, Formation of extended W pattern indicates prospects of a bullish trend Along with a bullish engulfing formation brace our expectation.