USD/JPY recovered from 101.00 (video)
By Kira Iukhtenko, FBS
Bearish pressure on the pair was not strong enough to pull the price below the 55-week MA at 101.00. USD/JPY bounced back from the 101.00 mark, recovering to 101.90 by the end of the week. The pair rose above the major 101.80 resistance – this is the summer 2014 trend resistance.
Demand for the Japanese yen was down amid disappointing news flow from Japan. June trade deficit contracted less than expected with exports being weak. Additional stimulus expectations could revive if Japanese data continues to worsen. In this case we could see more JPY weakness.
Demand on the US dollar is growing. Next week there is a bunch of important figures. Pay special attention to the US Q2 advance GBP on Wednesday (forecast: 3.1% vs. a 2.9% drop in Q1). USD/JPY could get some support from this figure. Later in the day FOMC will announce its policy meeting decision. However, NFP on Friday is forecasted to decline. Anyway, the US dataflow needs a clear switch to the positive side to change the traders’ attitude to the Fed’s monetary intentions.
We expect USD/JPY to extend growth at the beginning of the new week, but the 102.30/80 area will likely hold. Break below the 101.30 support could revive our bearish view.