USD/JPY WEEKLY OUTLOOK COME DEC 9TH-13TH; BEARISH PRICE IMMINENT FOR A WAVE LEG 2 COMPLETION

FUNDAMENTAL BEAM

USD/JPY posted modest gains last week, as the pair closed at 102.89. The upcoming week is busy, with 10 events. Here is an outlook on the major market-movers and an updated technical analysis for USD/JPY.

Japanese events were uneventful last week. In the US, employment numbers looked very sharp, led by a strong Non-Farm Payrolls.

A summary of key events during the week

1. Current Account: Sunday, 23:50. Current Account is closely linked to currency demand, as an improved current account reading means that foreigners are purchasing more yen to but domestic goods and services. After a disappointing deficit in October of -0.13 trillion yen, the markets are expecting a surplus for November, with an estimate of 0.12 trillion. If the indicator can meet or beat the estimate, we could see the yen gain ground.
2. Final GDP: Sunday, 23:50. GDP, released each quarter, is one of the most important economic indicators and is always closely watched by analysts. GDP posted a strong gain of 0.9% in Q2, just shy of the estimate of 1.0%. The markets are expecting a downturn in Q4, with an estimate of 0.4%.
3. Economy Watchers Sentiment: Monday, 5:00. This survey asks workers to rate economic conditions. The index has been above the 50-point level for most of 2013, signaling optimism. The index came in at 51.8 points in October and the estimate for November stands at 52.3 points.
4. BSI Manufacturing Index: Monday, 23:50. This important manufacturing indicator, released quarterly, tends to show significant movement, often leading to estimates that are well off the mark. The Q2 improved sharply to 15.2 points, well above the estimate of 7.2. The markets are expecting another strong release in Q3, with an estimate of 17.2. A reading above the zero level indicates optimism.
5. Tertiary Industry Activity: Monday, 23:50. This indicator looks at the value of services purchased by businesses and is an important gauge of business hiring and spending. The indicator has struggled, posting three declines in the past four releases. The markets are anticipating better news in November, with an estimate of a 0.3% gain.
6. 30-year Bond Auction: Tuesday, 3:45. The average yield on 30-year bonds has been very steady, with the previous yield coming in at 1.62%. As a minor event, this release is unlikely to have a major impact on the movement of USD/JPY.
7. Consumer Confidence: Tuesday, 5:00. Despite some improvement in the Japanese economy, consumer confidence remains weak. The October reading fell to 41.2 points, well short of the estimate of 46.3. A reading below the 50 level indicates pessimism. The estimate for the November release stands at 44.2 points.
8. Preliminary Machine Tool Orders: Tuesday, 6:00. This indicator surprised the markets with a strong gain of 8.4% in the previous reading. The indicator had posted consecutive declines since April 2012, so this rebound was welcome news from the manufacturing sector. The markets are hoping for another strong rise in the upcoming release.
9. Core Machinery Orders: Tuesday, 23:50. This important manufacturing release tends to fluctuate sharply, making accurate forecasts a tricky task. Last month’s decline of 2.1% missed the estimate of a 1.8% loss. The markets are expecting better news for November, with an estimate of 0.9%.
10. Revised Industrial Production: Friday, 4:30. This indicator measures manufacturing output. The indicator rose 1.3% in October, falling short of  the estimate of 1.5%. The estimate for the November release stands at 0.5%.

TECHNICAL BEAM

 

The U.S Greenback has substantially fared well against the Japanese yen during last week trading sessions recording a higher close at 102.89. Non-Farm payroll as expected was positive for the world power after they recorded a 7% decrease in unemployment rate- Dow Jones hitting an all time record high while other stocks also enjoyed considerable profits to close the weeks trading.

This week however could be a different ball game all together as signs of bearishness are beginning to emanate.

From the technical analysis chart above, market could possibly gear towards completing a wave 2 leg at 96.063. This price behavior could trigger an upset in the market trend thereby altering the general bullish trend of the market south-east.

NOTE: Price predictions produced by FibonacciPrice&PatternTrader may be affected by unforeseen 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.

HAPPY TRADING