Fundamental view:

US dollar showed a bullish trend against the Japanese yen this week. Japanese Prime Minister Yoshihide Suga, weak economic data and an extended pandemic emergency in much of the country were the reasons behind the yen weakness. It has to be noted that Mr. Suga had replaced Shinzo Abe last year who resigned for health reasons; this change in the leadership weighs on the yen. Japanese statistics portrayed an economy suffering from the pandemic resurgence.  On the other hand, Hopes from the federal bank to taper the bond purchases favored the dollar.

Japan Household Spending yearly report on 7th Sep and US EIA Cushing Crude Oil Stocks Change on 9th Sep created downtrend whereas US CB Employment Trends Index on 7th Sep and US JOLTS Job Openings on 8th Sep created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US Federal Budget Balance at Sep 13, Japan Industrial Production monthly report at Sep 14, Japan Tertiary Industry Activity Index monthly report, US EIA Crude Oil Stocks Change at Sep 15, US Retail Sales monthly report, US Initial Jobless Claims at Sep 16 and US Michigan Consumer Sentiment at Sep 17.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.03% higher than the previous week. Maintaining high at 110.45 and low at 109.62 showed a movement of 83 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 110.36 may open a clean path towards 110.82 and may take a way up to 111.19. Should 109.53 prove to be unreliable support, the USDJPY may sink downwards 109.16 and 108.70 respectively. In H4 chart, Formation of rounding bottom pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish engulfing formation braces our expectation.