Fundamental view:

USD/JPY has a constrained reaction to the war. Leaders from all the West’s nations have asked President Vladimir Putin to put a halt to the war, but of no use. On Thursday, Putin said that he aims to reach its goals and will continue no matter what. while Putin agreed on the creation of safe corridors to evacuate civilians, he persisted in bombing Ukrainian cities.  

The US dollar and American assets particularly the Treasuries is the global choice in times of trouble.  However, the US dollar is not alone a safe haven asset.  But also, Japan’s advanced economy, sophisticated financial system and social and political stability, have long being a attractive asset as a safety one from the Asian markets. It is worth noting that the Global crude oil prices are about 20% higher since the Russian attack on Ukraine. As long as the Ukraine war continues the USD/JPY will be pinned between the safety aspects of its components.

In this week, Japan Capital Spending yearly report on 2^nd March, Fed Chair Powell Testimony on 2^nd and 3^rd March and US Nonfarm Payrolls on 4^th March favored uptrend whereas MNI Chicago Business Barometer on 28^th February and  US Initial Jobless Claims on 1^st March favored downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan GDP quarterly report at Mar 08, BoJ Corporate Goods Price Index monthly report, US JOLTS Job Openings, US EIA Crude Oil Stocks Change, US WASDE Report at Mar 09, US Initial Jobless Claims, Federal Budget Balance at Mar 10, Michigan Consumer Sentiment at Mar 11.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.04% higher than the previous week. Maintaining high at 115.80 and low at 114.65 showed a movement of 115 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 115.50 may open a clean path towards 116.22 and may take a way up to 116.65. Should 114.35 prove to be unreliable support, the USDJPY may sink downwards 113.92 and 113.20 respectively. In H4 chart, Formation of bullish butterfly pattern indicates reversal of the trend creating prospects of a bullish trend Along with a hammer formation braces our expectation.