Last week the USDJPY currency pair posted a small loss, even though in the first part of the week the dollar had more buyers. Here is a wrap up of what happened and this week’s forecast on macro and technical analysis.

The Japanese Yen lost some ground in the beginning of last week, in front of the US dollar mainly because of the good economic releases from the United States. Thursday the yen started to be bought right after the ECB press conference. It gained some speed in its recovery on Friday after the Non-Farm Payroll release but it didn’t stop there because today the price of the USD/JPY currency pair dropped even more, touching a low at 102.85.

Next you will find several economic releases that might influence the USDJPY in the current week:

Current Account – Monday (23:50 GMT). Last month it dropped by 0.06T even though it was expected to rise with 0.12T. This month Japan’s Current Account it is expected to drop again with 0.02T.

Economy Watchers Sentiment – Tuesday (05:00 GMT). Readings above 50 mean that watchers are optimists in what concerns the economy’s evolution. For the past three publications the values were above expectations. Tomorrow economists are forecasting a value of 54.2 for this indicator.

Core Machine Orders m/m – Wednesday (23.50 GMT). This indicator is referring to changes in the total value of new private-sector purchase orders placed with manufacturers for machines, excluding ships and utilities. Last month’s publication was of 0.6% growth and the current expectations are of a 1.2 percent rise.

Tertiary Industry Activity – Wednesday (23:50 GMT). After a 0.7% drop in the December’s publication, this week it is forecast at 0.8% rise.

Consumer Confidence – Friday (05:00 GMT). For this indicator a high of the past 6 months was hit in October at 45.4. This week’s estimations are of a 43.4.

Economical Calendar

Current Account – Monday (23:50 GMT). Last month it dropped by 0.06T even though it was expected to rise with 0.12T. This month Japan’s Current Account it is expected to drop again with 0.02T.

Economy Watchers Sentiment – Tuesday (05:00 GMT). Readings above 50 mean that watchers are optimists in what concerns the economy’s evolution. For the past three publications the values were above expectations. Tomorrow economists are forecasting a value of 54.2 for this indicator.

Core Machine Orders m/m – Wednesday (23.50 GMT). This indicator is referring to changes in the total value of new private-sector purchase orders placed with manufacturers for machines, excluding ships and utilities. Last month’s publication was of 0.6% growth and the current expectations are of a 1.2 percent rise.

Tertiary Industry Activity – Wednesday (23:50 GMT). After a 0.7% drop in the December’s publication, this week it is forecast at 0.8% rise.

Consumer Confidence – Friday (05:00 GMT). For this indicator a high of the past 6 months was hit in October at 45.4. This week’s estimations are of a 43.4.

Technical View

Chart: USDJPY Daily

Support: 102.00, 101.00;

Resistance: 103.82, 105.41;

On the daily chart we can see that the uptrend line was broken after the RSI signaled a negative divergence. Friday and today were pretty good days for the Japanese yen which has fallen from a high of 105.33 all the way to 102.85. If the current day will close under 103.00 the probability for the price to continue the fall will be quite big. Next downside targets could be 102.00 and 101.00.

Chart: USDJPY H1

Support: 102.00;

Resistance: 103.80

After the price confirmed the Double Top pattern by a breakout under 103.80, it continued the downside move all the way to 102.85 low, hit today. The price pattern’s target it is found at 102.14, really close to the daily support from 102.00 (which is actually the 38.2 Fibonacci retrace from the entire uptrend.) A recovery of the US dollar can find a good resistance area around the daily resistance at 103.80.

Bullish or Bearish?

I believe that the Japanese yen will continue its rally in front of the US dollar during this week time. But I would be very attentive to a throwback that could aim to retest 103.80, which was a pretty support level. This last one mentioned could be a good selling level (in case of a retrace) if other bearish signals appear.

What is your prediction ? How will you trade the USD/JPY ?