USDJPY WEEKLY OUTLOOK

FUNDAMENTAL BEAM

USD/JPY reversed direction last week, as the Japanese yen posted modest gains. The pair closed the week at 97.69. This week’s schedule is very light, with just four releases. Here is an outlook on the major market-movers and an updated technical analysis for USD/JPY.

The US dollar was broadly weaker last week , as initial optimism over the debt deal quickly faded . The agreement reached in Congress is only for a few months, as the underlying budgetary issues are yet to be resolved.
A summary of major events surroundng this currency pair

1. Trade Balance: Sunday, 23:50. Japan continues to post monthly trade deficits. The August release showed improvement, narrowing to -0.79 trillion yen. This beat the estimate of -0.83 trillion. The markets are bracing for a weak release for September, with an estimate of -1.06 trillion.
2. All Industries Activities: Monday, 4:30. This indicator looks at the total amount of goods and services purchased by businesses. After posting a decline in August, the indicator rebounded last month with a gain of 0.5%. This beat the estimate of 0.3%. The forecast for the September release stands at 0.3%.
3. Tokyo Core CPI: Thursday, 23:30. Tokyo Core CPI is considered the most important inflation indicator and can affect the movement of USD/JPY. The index has been posting gains in recent months as we see inflation in the Japanese economy. The index posted a gain of 0.2% in August, and the estimate for September stands at 0.4%.
4. CSPI: Thursday, 23:50. The Corporate Services Price Index has also been posting gains in recent months, and came in at 0.6% in August, a multi-year high. The markets are expecting the upward trend to continue, with an estimate of 0.8%.

TECHNICAL BEAM

USDJPY could well be heading close to the technical support 93.85 recorded 13th of june, 2013. After completing a 61.8% Fibonacci retracement  up to 100.48; the pair has continued bearish and may possibly go spike beyond the technical resistance. This is no news looking at the figures coming out of the states. Uncompromising growth figures on  top of deadlocked government talk concerning the health care bill continue to drag down the U.S  Greenback against other currencies.
Here is a chart representing the possible future behavior of this pair

Hence, for this pair we expect prices to finish wave II leg at an intermediate support 95.00 before  making a possible retracement to 96.71 to begin a new weekly trend for the bull.

NOTE: Price predictions produced by FibonacciPrice&PatternTrader may be affected by unforseen events like hurricane, earth quake, flood and other natural disasters consequently changing price patterns already predicted. Hence we advice strict adherence to money management techniques.

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