USD/JPY: outlook for Aug. 29 - Sep. 4
Last week USD/JPY managed to hold above 100.00 support and rise to 101.80 on the hawkish comments from the Federal Reserve.
In addition, data showed that Japanese core consumer prices fell for a fifth month in a row and marked the biggest annual drop in more than three years in July. Such statistics will keep the Bank of Japan under pressure to ease monetary policy in September and represent a bullish factor for USD/JPY.
Technically USD/JPY has potential to strengthen to 103.00/50 and 104.00 before it faces downtrend resistance line of 2016. Only a big increase in market’s expectations of the Fed’s rate hike will make the pair reverse the overall bearish trend, so be careful with bullish targets and look for the signals that the bullish correction is over at the mentioned resistance levels. Support is located at 101.80, 101.00 and 100.00.
Japan will release household spending on Tuesday, preliminary industrial production on Wednesday and capital spending on Thursday. Also watch US economic calendar.