USDJPY WEEKLY OUTLOOK; PRICES LIKELY TO FALL TOWARDS TECHNICAL RESISTANCE

FUNDAMENTAL BEAM

The yen weakened last week, as USD/JPY gained about 100 points. USD/JPY closed the week at 98.61. The upcoming week is a quiet one, with just five events. Here is an outlook on the major market-movers and an updated technical analysis for USD/JPY.

The US started out the week with some disappointing releases, but recovered as Unemployment Claims was solid and manufacturing data beat expectations, and the US dollar moved higher.

A summary of key events during the week

1. Monetary Base: Monday, 23:50. Monetary Base continues to post gains, as the BOJ continues its aggressive stimulus program. The indicator was up 46.1% last month, higher than the estimate of 45.3%. The forecast for the October release stands at 48.3%.
2. BOJ Governor Haruhiko Kuroda:Tuesday, 5:30. Kuroda will speak at an event in Osaka. Analysts will be keeping close tabs for any hints regarding the Bank’s future monetary policy.
3. Monetary Policy Meeting Minutes: Tuesday, 23:50. The BOJ made no change to interest rate or QE levels at its policy meeting last week, and the minutes provides details about the factors that led to the decisions as well and provides the views of the policymakers who participated in the meeting.
4. 10-year Bond Auction: Wednesday, 3:45. The yield on 10-year bonds has been slowly falling, and the average yield at the previous auction came in at 0.68%. The markets are not expecting a significant change at the upcoming auction.
5. Leading Indicators: Thursday, 5:00. This index is based on 11 economic indicators, but is considered a minor release since most of the data has been released previously. The index dropped slightly in September, coming in at 106.5%. The markets are expecting an improvement for October, with an estimate of 109.4%.

TECHNICAL BEAM

After edging higher last week as forecasted by our technical  analysis; USDJPY may likely drop to its previous technical resistance established at 96.95 possibly moving close to the demand level of 96.22. This is following the completion of a minor intermediate corrective wave leg c for a relatively strong USD.

Hence. analysis described in  the chart above will see the pair open with a gap up at the open of the asian session to consequently begin its bearish move or retrace a little bit northeast o money trading session and afterwards enters a bearish overall.

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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