Fundamental view:

The USD/JPY pair fell to a fresh monthly low of 103.25 this week as the greenback plummeted on the back of the market’s hopes. The pair neared June 2020 low at 103.17, bouncing ahead of the Fed’s announcement, as poor US data dented investors’ mood. The Bank of Japan’s decisions to leave interest rates and yield-curve control policy unchanged were expected. Overall the pair showed a bearish move.

In the past week, US Flash Manufacturing PMI on 16^th December and US Building Permits  on 17^th December favors uptrend whereas Japan Tankan Manufacturing Index & Japan Revised Industrial Production monthly report on 14^th December and  US TIC Long-Term Purchases on 16^th December favors downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are BoJ Monetary Policy Meeting Minutes, US GDP quarterly report, US CB Consumer Confidence Index at Dec 22, Japan Unemployment Rate, US Core Durable Goods Orders monthly report, and US Initial Jobless Claims at Dec 24.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.40% lower than the previous week. Maintaining high at 104.15 and low at 102.87 showed a movement of 128 pips.

In the upcoming week we expect USD/JPY to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 102.72 may open a clean path towards 102.16 and may take a way down to 101.44. Should 103.99 prove to be unreliable resistance, the USDJPY may raise upwards 104.71 and 105.27 respectively.  In H4 chart, Formation of bearish 5-D pattern indicates reversal of the trend creating prospects of a bearish trend Along with a bearish spinning top formation braces our expectation.