USD/JPY: forecast fot July 6-12
By Elizabeth Belugina
As expected, USD/JPY had a volatile week. Risk sentiment was negative because of the uncertain future of Greece and decline in Chinese stocks. The pair was also moved by the economic data from America: there were good figures on Wednesday, but disappointing labor market figures on Thursday. At the same time, the NFP was still above 200K. As a result, many players will continue expecting the Federal Reserve’s rate hike in September.
Next week Japan’s economic calendar will be rather empty. We can only pick out current account on Wednesday and core machinery orders on Thursday. It’s more important to watch the minutes of the Fed’s June meeting due on Wednesday. The start of the week will be determined by the outcome of the Greek bailout vote: we may see another opening gap. The closer Greece is to leaving the euro area, the stronger will be negative pressure on the US dollar versus the yen.
Technically USD/JPY is forming a wedge-like descending trend which will remain corrective as long as the pair is above the 122.00/121.75/121.55 zone. Here the pair will be supported by the daily Ichimoku Cloud, so the bulls will defend these levels with much force. Further support is at 120.95 and 120.50. On the daily chart the pair formed the bullish “hammer” on Tuesday, but a bearish “shooting star” on Thursday. On the upside resistance is at 123.50/70 and the key one at 124.46/50 which guards the way to June highs at 125.85.