USD/JPY Forecast Nov. 23-27 – Investors Await Japan Inflation Data
Dollar/yen continues to show robust movement, as the pair fell 0.75% last week. The focus will be on Japanese inflation indicators, including BoJ Core Inflation - the Bank of Japan’s preferred inflation indicator.
USD/JPY fundamental mover
Japan’s GDP declined by 7.8% in Q2, but rebounded in Q3 and posted a gain of 5.0%. Inflation remains at low levels, as National Core CPI came in at -0.7%. The index last posted a gain in March.
In the US, the Empire State Manufacturing Index fell from 10.5 to 6.3, as the rate of expansion slowed for a second straight month. The Philly Fed Manufacturing Index fell to 26.3, down from 32.3 points. Retail sales fell sharply in October, which weighed on the US dollar. Headline retail sales fell from 1.9% to 0.3%. This was the weakest gain since April. The core reading slowed to 0.2%, down from 1.5% beforehand.
USD/JPY Daily Chart
USD/JPY Technical Analysis
- 107.92 is an important monthly resistance line.
- 106.66 has held in resistance since the end of August.
- 105.52 (mentioned last week) is next.
- 104.11 remains a weak resistance line.
- 103.52 is the first support level.
- 102.13 has provided support since March.
- 101.51 is the final support line for now.
I am neutral on USD/JPY
Investors have shown an appetite for risk, which has hurt the US dollar. The yen is also a safe-haven asset, so investors may not be all that attracted to the Japanese currency.
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