Fundamental view:

The US dollar has rose drastically against the yen during the week after the Federal Reserve spook the markets by suggesting they may actually see inflation. As widely expected, the Federal Open Market Committee (FOMC), left the fed funds target range at 0.0% to 0.25%, where it has been since March 2020 and did not alter the $120 billion a month of credit asset purchases. Overall the dollar is trading high against yen.

Japan Industrial Production monthly report on 14th June and US Initial Jobless Claims & US Initial Jobless Claims 4-Week Average on 17th June favored bearish trend for the pair whereas Japan Adjusted Trade Balance on 16th June, US EIA Crude Oil Stocks Change on 16th June favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are BoJ Monetary Policy Meeting Minutes, Fed Chair Powell Testimony at Jun 22, Japan Markit Manufacturing PMI, US Markit Manufacturing PMI at Jun 23, BoJ Governor Kuroda Speech, US GDP quarterly report, US Core Durable Goods Orders, US Initial Jobless Claims at Jun 24 and US Core PCE Price Index at Jun 25.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.90% higher than the previous week. Maintaining high at 110.82 and low at 109.60 showed a movement of 122 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 110.82 may open a clean path towards 111.43 and may take a way up to 112.04. Should 109.60 prove to be unreliable support, the USDJPY may sink downwards 108.99 and 108.38 respectively. In H4 chart diamond pattern breakout favors prospects of a bullish trend Along with a bullish engulfing formation braces our expectation.