Fundamental view:

USD traded strongly against the yen the course of the week, to pierce the ¥109 level. This is probably not about the US dollar, but because of the Japanese yen as it is getting hammered by several different currencies right now. In Japan, the BOJ has kept monetary policy unchanged as universally anticipated. Governor Haruhiko Kuroda said he is prepared to extend the pandemic relief programs beyond the September deadline. He did not expect inflation to reach its 2% target by the time of his retirement in early 2023. In the US, the central bank also left policy unchanged. Fed Chair Jerome Powell refused to speculate when or under what conditions the governors might reduce the $120 billion of monthly asset purchases that have pinned the short end of the Treasury yield curve.  

Japan BoJ Corporate Services Price Index yearly report on 26^th April and Japan BoJ Trimmed Mean Core CPI on 27^th April favored downtrend for the pair whereas US Durable Goods Orders monthly report on 26^th April and Japan Construction Orders on 28^th April favored uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI, Fed Chair Powell Speech at May 03, BoJ Monetary Policy Meeting Minutes, US ADP Nonfarm Employment Change, US EIA Crude Oil Stocks Change at May 05, US Initial Jobless Claims at May 06, Japan Markit Services PMI, US Nonfarm Payrolls at May 07.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.49% higher than the previous week. Maintaining high at 109.37 and low at 107.64 showed a movement of 173 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 109.85 may open a clean path towards 110.48 and may take a way up to 111.58. Should 108.12 prove to be unreliable support, the USDJPY may sink downwards 107.02 and 106.39 respectively. In H4 chart, Formation of cup and handle pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish three inside up pattern formation braces our expectation.