Fundamental view:

US dollar has rallied against all the majors in this week, It was also noisy against the Japanese yen. Federal Reserve has launched its bond program taper at previous Wednesday’s meeting with a $15 billion reduction in monthly purchases, only November and December were spoken for in the FOMC statement. Elsewhere the governors said they expected the cuts to continue However this decision would turn on progress of the US economy.  On the other hand, Japanese economic information improved though consumer weakness continued. Prime Minister of Japan, Fumio Kishida has promised the standard fiscal spending and monetary stimulus policies and a desire for a weaker yen that have routinely failed to improve the nation’s economic prospects over three decades.

BoJ M2 Money Stock yearly report on 10^th November and US JOLTS Job Openings on 12^th November favored bearish trend whereas US core CPI monthly report on 10^th November and FOMC Member Williams Speech on 12^th November favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Industrial Production monthly report at Nov 15, Japan Tertiary Industry Activity Index monthly report, US Retail Sales monthly report, Fed Industrial Production monthly report at Nov 16, US EIA Crude Oil Stocks Change at Nov 17, Initial Jobless Claims at Nov 18 and Fed Governor Waller Speech at Nov 19.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.12% lower than the previous week. Maintaining high at 114.30 and low at 112.72 showed a movement of 158 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 114.54 may open a clean path towards 115.21 and may take a way up to 116.12. Should 112.96 prove to be unreliable support, the USDJPY may sink downwards to 112.05 and 111.38 respectively. In H4 chart, Formation of rounding bottom pattern indicates the reversal of the trend creating prospects of a bullish trend. Hammer formation supports our expectation.