USD/JPY Weekly Forex Forecast – 19th to 23rd Feb 2018
Technical Outlook: The USD/JPY broke down last week as price action posted strong declines after breaking out from the support level formed at 108.43. This downside price action sent USD/JPY to test new lows near 105.77. The currency pair managed to post a reversal here with Friday’s price action closing somewhat modestly higher. However, we expect that any near term gains will be capped near 107.32 which marked the 161.8% Fibonacci extension target of the descending triangle pattern. Resistance is likely to send price action to post a reversal. In the event of a failure, expect USD/JPY to retest the original support breakout at 108.45 to establish resistance.
Fundamental Outlook: Data from Japan this week is very quiet with only the flash manufacturing PMI figures for February coming out on Wednesday. Previously, Japan’s manufacturing PMI data for January showed that the economy’s industry was surging ahead in full steam. Data showed that manufacturing activity had picked up and this is expected to see in new job creation as well as increased wage growth in the nation. Later in the day, the all industries activity data will also be coming out. The events are unlikely to make an impact on the market this week with the Japanese yen focusing on the broader market sentiment.