USD JPY Weekly Forecast | February 13, 2017
After trading lower earlier in the week due to increased demand for lower-risk assets, the USD JPY rebounded to close higher for the week.
The USD JPY closed the week at 113.164, up 0.613 or +0.54%.
The Greenback started to pick up strength after Philadelphia Fed President Patrick Harker said he could support a rate hike at the central bank’s March meeting.
“I think March is on the table. I would never take a meeting off the table,” Harker told reporters after a speech in San Diego. He also reiterated his support for about three rate increases this year.
Barring any unexpected remarks from President Trump, the primary focus for traders this week will be on the U.S. Consumer Inflation and Retail Sales reports on February 15 and the two-day testimony of Fed Chair Janet Yellen on February 14 -15.
Monthly U.S. CPI is expected to come in at 0.3%, Core CPI at 0.2%. Retail Sales are expected to post a 0.1% gain with Core Retail Sales coming in at 0.4%. Traders will be looking at Yellen for clues as to the timing of the next interest rate cut.
Early Monday, Japan will release preliminary GDP data. It is expected to show the economy grew last quarter by 3.3%.
The USD/JPY will be controlled by investor sentiment this week. Greater demand for higher risk will underpin the Forex pair. Increased demand for lower risk will make the Japanese Yen a more desirable asset.
Over the week-end North Korea fired off a new ballistic missile. This may have a negative effect on the markets in Asia early Sunday. If so, investors may support the Japanese Yen. The duration of the move will be determined by how European and U.S. markets respond.
USD JPY Technical Overview
Prev. Close 113.19
Weekly trading Range 113.46 – 114.17
52 wk Range 99.08 – 118.67
1-Year Return 0.61%
USD JPY Support and Resistance Forecast
S 1: 112.01
S 2: 111.46
S 3: 110.58
R 1: 113.77
R 2: 114.32
R 3: 115.20