Fundamental view:

Japan installed a new prime minister and the Federal Reserve stretched its zero rate prediction to the end of 2023 which made the pair to rally downwards in the last week. Japan Revised Industrial Production on 14^th September, Japan Trade Balance on 16^th September and Building Permits on 17^th September created downtrend for the pair whereas US Business Inventories m/m, Crude Oil Inventories on 16^th September and US Prelim UoM Consumer Sentiment on 18^th September created uptrend for the pair.

US dollar has started to show signs of strength against other currencies and we expect an uptrend of the pair in the upcoming week.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Testimony at Sep 22, BoJ Monetary Policy Meeting Minutes, Japan Markit Manufacturing PMI at Sep 23, US Markit Manufacturing PMI, EIA Crude Oil Stocks Change at Sep 23, and US Core Durable Goods Orders monthly report at Sep 25.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.21% lower than the previous week. Maintaining high at 106.16 and low at 104.27 showed a movement of 189 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the upside. A solid breakout above 105.72 may open a clean path towards 106.89 and may take a way up to 107.62. Should 103.83 prove to be unreliable support, the USDJPY may sink downwards 103.10 and 101.94 respectively. In H4 chart, Formation of bullish 3 drives pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish hammer formation braces our expectation.