Fundamental view:

The USD/JPY showed a mixed trend in the last week. There’s still plenty of uncertainty, and USD/JPY trading is volatile since both the U.S. dollar and the Japanese yen serve as safe haven assets. The market continues to be driven based upon the idea of stimulus and risk appetite, which of course is all over the place. With that in mind, we expect an short term downtrend for the pair in the upcoming week.

US Trade Balance on 6^th October and Japan Current Account on 8^th October favored downtrend for the pair whereas US ISM Services PMI on 5^th October and Unemployment Claims on 8^th October favored uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Federal Budget Balance, US Core PPI monthly report at Oct 13, Japan Industrial Production monthly report at Oct 14, US Initial Jobless Claims, Japan Tertiary Industry Activity Index monthly report, at Oct 15, and US Retail Sales monthly report at Oct 16.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.29% higher than the previous week. Maintaining high at 106.10 and low at 105.40 showed a movement of 70 pips.

In the upcoming week we expect USD/JPY to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 105.32 may open a clean path towards 105.01 and may take a way down to 104.61. Should 106.02 prove to be unreliable resistance, the USDJPY may raise upwards 106.41 and 106.72 respectively. In H4 chart, Formation of rounding top pattern indicates reversal of the trend creating prospects of a bearish trend Along with a bearish spinning top formation braces our expectation.