Fundamental view:

The US dollar has initially tried to rally during the week against the Japanese yen but yen managed and formed a bearish candle in the week. There was a lot of downward pressure in the past week due to broad US dollar weakness.  Furthermore, we have the US Senate runoff elections in Georgia that could cause a bit of volatility early next week as well. All things being equal, this is a market that should continue the trend, but we may get a sudden bit of volatility along the way.

In the past week, US S&P/CS HPI Composite-20 yearly report on 29^th Dec framed bullish trend whereas US S&P/CS HPI Composite-20 yearly report on 28^th Dec and US Goods Trade Balance & US Pending Home Sales monthly report on 30^th Dec created framed bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are BoJ Monetary Base yearly report, OPEC Meeting at Jan 04, US ISM Manufacturing PMI at Jan 05, US ADP Nonfarm Employment Change at Jan 06, US Initial Jobless Claims, Japan Household Spending yearly report, US ISM Non-Manufacturing PMI at Jan 07, and US Nonfarm Payrolls at Jan 08.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.01% higher than the previous week. Maintaining high at 103.90 and low at 102.96 showed a movement of 94 pips.

In the upcoming week we expect USD/JPY to show a bearish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the downside. A solid breakout below 102.81 may open a clean path towards 102.41 and may take a way down to 101.87. Should 103.74 prove to be unreliable resistance, the USDJPY may raise upwards 104.29 and 104.68 respectively. In H4 chart, Formation of double top pattern formation indicates prospects of a bearish trend Along with a bearish engulfing formation braces our expectation.