Fundamental view:

The US dollar has initially rallied during the course of the week, but then turned around to form to make a fall. Inflation in the US economy has been pushing market speculation toward the idea that the Fed will be forced to consider tapering its bond purchases. But the weaker labor markets will keep the Fed on hold at least through the end of the second quarter as its policy is explicitly tied to job creation. The Fed’s insistence on labor market primacy and its adoption of inflation-averaging last fall, means the FOMC needs the permission of payrolls to move on rates.

BoJ Monetary Base yearly report on 2^nd June and US Challenger Job Cuts yearly report and US ADP Nonfarm Employment Change on 3^rd June created bullish trend whereas Japan Capital Spending yearly report on 1^st June and Japan Household Spending yearly report on 4^th June created bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan GDP quarterly report at Jun 07, US JOLTS Job Openings at Jun 08, BoJ Corporate Goods Price Index monthly report, US EIA Crude Oil Stocks Change at Jun 09, US Core CPI monthly report, Japan BSI Large Manufacturing, US Initial Jobless Claims at Jun 10 and US Michigan Consumer Sentiment at Jun11.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.12% higher than the previous week. Maintaining high at 110.32 and low at 109.32 showed a movement of 100 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 110.11 may open a clean path towards 110.72 and may take a way up to 111.11. Should 109.11 prove to be unreliable support, the USDJPY may sink downwards 108.72 and 108.11 respectively. In H4 chart, Formation of bullish shark pattern indicates reversal of the trend creating prospects of a bullish trend Along with a three outside down formation braces our expectation.