Fundamental view:

The US dollar has pulled back significantly during the course of the week to test the ¥109 level for support. With following the bouncing yields, the fall for the first four days as US Treasury yields saw their deepest losses in a month then rebounded as the credit market reversed on Friday. On the other hand, Interest rates in the first three months of the year quarter have responded to the brightening prospects for the US economy.

US Crude Oil Inventories on 14^th April and US Natural Gas Storage on 15^th April created uptrend for the pair whereas Japan PPI yearly report and US Federal Budget Balance on 12^th April created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Industrial Production monthly report at April 19, Japan Tertiary Industry Activity monthly report at April 20, US EIA Crude Oil Stocks Change at April 21, Japan National Core CPI yearly report, US Initial Jobless Claims at April 22, Japan Flash Manufacturing PMI and US Markit Manufacturing PMI at April 23.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.89% lower than the previous week. Maintaining high at 109.77 and low at 108.61 showed a movement of 116 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout above 109.49 may open a clean path towards 110.21 and may take a way up to 110.65. Should 108.33 prove to be unreliable support, the USDJPY may sink downwards 107.89 and 107.17 respectively. In H4 chart, Formation of bullish butterfly pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish hammer formation braces our expectation.