Fundamental view:

US dollar rallied against the Japanese yen during the trading course of the week. The hawkish fed and Risk sentiment due to the Ukraine war boosted the greenback. The Fed policymakers reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet .New York Fed President John Williams said that a half-point hike at the May 4 meeting  was a “very reasonable option” but that the pace of increases depends on the economy. The Ukraine war is a ugly one and a cease-fire seems unlikely. Russia reported that the flagship of its Black Sea fleet had been sunk. Kiyv claimed the attack. Negotiations continued.  However the Ukrainian foreign minister said there had been no progress. 

On the other hand, The Bank of Japan (BoJ) has noticed the rapid depreciation of the yen saying it is watching the market closely but with national CPI at 0.9% annually in February and core at -1%, it is not about to intervene in the currency markets. 

In this week, BoJ Corporate Goods Price Index monthly report on 12^th April and US Initial Jobless claims on 14^th April boosted bearish trend whereas FOMC Member Williams Speech on 11^th April, US CPI monthly report on 12^th April and Japan Core Machinery Orders monthly report on 13^th April boosted the 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, US Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21, Japan au Jibun Bank Manufacturing PMI and US S&P Global Manufacturing PMI at Apr 22.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 1.60% higher than the previous week. Maintaining high at 126.67 and low at 124.18 showed a movement of 249 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 127.35 may open a clean path towards 128.25 and may take a way up to 129.84. Should 124.86 prove to be unreliable support, the USDJPY may sink downwards 123.27 and 122.37 respectively. In H4 chart, Formation of bullish pennant pattern indicates continuation of the trend creating prospects of a bullish trend Along with a bullish hammer formation braces our expectation.