USD/JPY Weekly Forex Forecast – 26th Feb to 2nd Mar 2018
Technical Outlook: The USD/JPY managed to retrace the losses after prices previously fell to lows around 106.00 region. The rebound pushed USD/JPY to test intermediary highs near the 107.00 region. The pullback off this level has resulted in USD/JPY posting a higher low. We see strong bullish divergence as per the current set up. USD/JPY is expected to retrace towards the breached support level at 108.43 in order to establish resistance at this level. This could potentially signal a key point in USD/JPY as further continuation can be expected on a breakout above 108.43.
Fundamental Outlook: Data from Japan will see the release of mostly second tier data. However, the housing spending and unemployment rate details will likely shed light on whether wages are rising in Japan. Wage growth is an essential aspect as the Bank of Japan struggles to keep inflation alive. The recent uptick in inflation from Japan was somewhat encouraging however. Later in the week on Thursday inflation figures will dominate the headlines with the release of the Tokyo CPI and the Bank of Japan’s core CPI measure.