Fundamental view:

The yen pair climbed up and reached a high of 2022 – 116.35 which is also a four year top. The Ukraine crisis, US and Japan Bank Meeting are the major catalysts in driving the pair’s move. Market sentiment was down for most of the week but improved at the weekend on Friday with Russian President Vladimir Putin’s comment that there were “certain positive developments” in talks with Ukraine that undermined the yen safety trade.

The Fed has promised a 0.25% hike on March 16. Treasury futures have the odds at 95.9%. Markets are undecided whether the governors will initiate a reduction of the bank’s $9 trillion balance sheet. Whereas on the other hand, the  Bank of Japan is expected to maintain its -0.1% main rate at its meeting on Friday. 

In this week, Japan Adjusted Current Account on 7^th March and US JOLTS Job Openings on 9^th March favored bullish trend whereas Japan Household Spending yearly report on 10^th March and Michigan Consumer Sentiment on 11^th March favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are NY Fed Empire State Manufacturing Index at Mar 15, Japan Industrial Production monthly report, US Retail Sales monthly report, Fed Interest Rate Decision at Mar 16, Initial Jobless Claims, US Fed Industrial Production yearly report at Mar 17, BoJ Interest Rate Decision and Fed Governor Bowman Speech at Mar 18.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 1.34% higher than the previous week. Maintaining high at 117.35 and low at 114.81 showed a movement of 254 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 118.14 may open a clean path towards 119.01 and may take a way up to 120.68. Should 115.60 prove to be unreliable support, the USDJPY may sink downwards 113.93 and 113.06 respectively. In H4 chart, Formation of double bottom pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish engulfing formation braces our expectation.