This weekly USDJPY technical analysis for August 22-26 includes a recap of last week’s Japan and US fundamental developments. More importantly, it contains the special outlook for the upcoming week. What should you pay attention to for USDJPY?
22 August, AtoZForex – The following are my Forex technical analysis for this week of August for USDJPY currency pair.
Weekly USDJPY technical analysis
Major Resistances at 101.29 ( August 16 high), 101.75 (100-day SMA) and 102.53 (August 9 high).
Major Supports at 100.02 (Aug 17 low), 99.64 (August 18 low) and 98.98 (Brexit/June 24 low).
Recap of Last Week
The Japanese Yen has continued strength for the fourth straight weeks, as the pair opened at 101.16 and closed 17 pips above the psychological level 100.00. The week recorded with a high of 101.45 and a low of 99.53 with 192 pips swing low. This is relatively low volatile trading week compared to previous weeks. For the first 4 trading days, the greenback continued to weaken but last Friday it regained some lost ground courtesy of the recent hawkish tone from San Francisco Federal Reserve Bank President John Williams stating “In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later”.
Also see: EURUSD Weekly Analysis
What to expect this week
For Yen, this week’s key event are the speech of BOJ Governor Kuroda and Tokyo Core CPI. Moments before and during Governor Kuroda speaks, we can expect a volatile movement. As for Tokyo Core CPI, it is worth a note that it has failed to post any gains in 2016 pointing to deflation.
For US Dollar, the key events are the Jackson Hole Symposium and the speech of Federal Chairman on Friday. The Jackson Hole Symposium will start on Friday and will conclude on Sunday. The focus this year’s symposium is the Designing of resilient monetary policy frameworks for the future. The members have turned their focus on the level of the neutral real rate and the possibility of a higher inflation target. During this event, we may expect some of FOMC members reveal their views on these topics.” As for the scheduled speech of Chairman Yellen, this will give a clear direction if the central bank will keep interest rates lower for longer or will proceed with rate hike by September. We will expect a big movement during her speech, thus we must prepare for either way.
Technically, the bear is still in control. MACD is still below the (0) level while the 20 and 100 moving average are still above candles. Currently, the price is retesting some of the major support levels that act now as resistance. A break above the 20 moving average will give a short-term uptrend with 100 MA as the new resistance level.
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