Currency Analyst since 2010

USD/JPY: forecast for September 7-13

By Elizabeth Belugina

After topping in the 121.70 area USD/JPY made another top in the 120.70 region. Demand for the yen as a safe haven limited the pair on the upside provoked a selloff to the 119.00 area.

As for the drivers from America, we should note that US nonfarm payrolls data weren’t very high coming below 200K. This might be the negative seasonal factors in play. Still, American unemployment rate declined and average earnings rose. Such mixed release means that the debate on whether US economy is in a good enough shape for the Federal Reserve to raise interest rates in September will surely continue in the coming week.

Next week Japan will release current account and final GDP on Tuesday and some manufacturing data on Thursday and Friday. Japanese economic growth is unlikely to be revised to the upside. All in all, the speculation about the Fed’s rate hike timing and the markets risk sentiment will be the key themes for the market. The situation of risk aversion will likely continue as money is flowing out of China. Pay attention to the release of Chinese trade balance on Tuesday and inflation on Thursday.

Technical picture. USD/JPY has strong resistance levels at 120.70, 121.70 and 122.00 – levels, which will be hard for the bulls to get through. Support is in the 118.30/00. Below that there should be buying interest from Japanese companies. Next support is at 116.00. 

Chart. Daily USD/JPY


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