Fundamental view:

Japanese yen edged higher against the US dollar during the trading course of the week. Russian intentions over Ukraine and the headlines regarding the military and diplomatic situation and the dovish Fed were the key catalysts for the USD/JPY movement. Ukrainian political and military tension weakened the USD.JPY as the safe-haven flows in the pair favor the yen over the dollar. However, Traders chose US dollar against other major currencies and the safety purchases of US Treasuries lower yields weakened the greenback. The Federal Reserve released Minutes of the latest FOMC meeting on Wednesday, and the document portrayed that the policymakers are ready to rate hike and preparing for plans to reduce the balance sheet. However, Market expectation was not meet as voting members maintained a measured approach to monetary policy tightening.

On the other hand, Japanese fourth quarter GDP (QoQ) at 1.3% was stronger than the -0.4% Annualized GDP was 5.4% stronger than the -1.5 % expectation and previous 2.7% decrease.

In this week, US PPI monthly report on 15^th February and Japan Tertiary Industry Activity Index monthly report on 16^th February favored bullish trend whereas Japan GDP quarterly report on 15^th February and US EIA Crude Oil Stocks Change on 16^th February favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Markit Manufacturing PMI, Fed Governor Bowman Speech at Feb 21, US CB Consumer Confidence Index at Feb 22, Tokyo CPI yearly report, US GDP quarterly report, Initial Jobless Claims, EIA Crude Oil Stocks Change at Feb 24, US Core Durable Goods Orders monthly report and Michigan Consumer Sentiment at Feb 25.  

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.40% lower than the previous week. Maintaining high at 115.87 and low at 114.79 showed a movement of 108 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 115.62 may open a clean path towards 116.29 and may take a way up to 116.70. Should 114.54 prove to be unreliable support, the USDJPY may sink downwards 114.13 and 113.46 respectively. In H4 chart, if breakout of the falling wedge is to the upside then bullish expectation is favored. Also to be noted hammer formation exerts the expectation of uptrend for the pair.