Fundamental view:

The pair managed first but later fell by Wednesday. The once and future US stimulus package is the market intervention of the month. As the Republicans and Democrats tried to wring as much electoral advantage from negotiations, hopeful statements for a deal from Democratic House Speaker Nancy Pelosi and President Donald Trump on Wednesday sent to a low. Japanese inflation dropped to its lowest annual level in three years falling to 0% in September from 0.2% in August. Core inflation rose from -0.1% to flat

Japan Trade Balance on 19^th Oct and US Crude Oil Inventories on 21^st Oct favored a bullish move for the pair whereas US Crude Oil Inventories on 20^th Oct and Japan National Core CPI yearly report on 23^rd Oct favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are US Core Durable Goods Orders monthly report, US CB Consumer Confidence Index at Oct 27, Japan Retail Sales monthly report Oct 28, BoJ Interest Rate Decision, US GDP quarterly report at Oct 29, and US Core PCE Price Index yearly report at Oct 30.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.02% higher than the previous week. Maintaining high at 105.74 and low at 104.34 showed a movement of 140 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 upside. A solid breakout below 104.12 may open a clean path towards 103.52 and may take a way down to 102.71. Should 105.52 prove to be unreliable resistance, the USDJPY may raise upwards 106.34 and 106.93 respectively. In H4 chart, the breakout of the pennant pattern to the downside favors our bearish expectation. Also to be noted shooting star formation exerts the expectation of downtrend for the pair.