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• The USD/JPY pair waffled back below 149.00 on Friday as risk appetite recovered.
• The US dollar saw selling pressure across the board.
• Coming up next week: Japanese national inflation data and the start of Jackson Hole.

The USD/JPY currency pair eased lower on Friday, as it slipped below the 149.00 level early in the day and tested the 148.00 handle. The US dollar was getting sold off across the board as broad-market sentiment recovered on the back of an upturn in US consumer sentiment figures.

The University of Michigan’s Consumer Sentiment Index showed a firmer-than-expected recovery in surveyed consumers’ outlook in August, rising to 67.8 from the previous 66.4, handily beating the forecast 66.9.

Investors grabbed onto the headline print and piled back into riskier assets while selling the greenback, despite the UoM 5-year Consumer Inflation Expectations in August holding steady at 3%, and a slight decay in UoM Consumer Current Conditions outlook, which eased to 60.9 from 62.7, entirely reversing direction on the forecast 63.1.

Next week will open with a quiet tinge to the economic calendar, and the key print for the yen will be Japanese National Consumer Price Index (CPI) inflation figures, while US traders will be turning to focus on the kickoff of the Jackson Hole economic symposium later in the week.

USD/JPY Price Forecast

Friday’s decline in USD/JPY bids dropped the pair back below a rising trendline on daily candlesticks, but the price action was still drifting into the high end as buyers took a breather.

The USD/JPY pair continued to trade on the south side of the 200-day Exponential Moving Average (EMA) near the 151.67 mark. A poorly-timed break in bullish pressure could see another shortside technical leg begin to form as intraday bids grapple with technical levels below the 149.00 figure.

USD/JPY Daily Chart

(Click on image to enlarge) 

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