USD/JPY: What to Expect From The Yen This Week
USD/JPY has kicked-off the new trading week slightly softer, despite the Japanese Gross Domestic Product (GBP) coming in lower than expected.
The Yen has strengthened against the US dollar by 0.23 (0.18 percent) to 133.24 in early Asian trading on Monday, despite second-quarter GDP announced below analyst forecasts.
GDP for the 3 months leading to June rose just 0.5 percent, below the forecast 0.6 percent, but much higher than the -0.1 percent recorded in Q1. Annualized GDP picked up to 2.2 percent vs -0.5 percent in Q1, although still lower than the expected 2.5 percent.
Later today, Industrial Production data for June is expected to show a sharp contraction. The median analysts forecast is -7.5%, down from 8.9% in May.
Moving ahead to Wednesday, we have the Trade Balance data for July. And on Friday, the National CPI will reveal whether Japanese inflation is still rising.
On the dollar front, a number of fed speakers this week will shed light on how the FOMC are interpreting the recent data across the pond. Aside from that, all eyes will be on Wednesday’s retail sales, and the Philadelphia Fed Manufacturing Index on Thursday.
Dollar to Yen Outlook
Considering the data-packed week ahead, USD/JPY will likely trade in a tight range until Wednesday.
The 50-Day Moving Average (DMA) at 135.32 (green line) should continue to provide strong overhead resistance. Whilst the longer-term 100-DMA at 131.49 (blue line) provides price support.
The Relative Strength Index (RSI) is grinding sideways at 43.85. Which highlights a clear lack of either bullish or bearish momentum.
For now, sideways price-action should prevail. However, we should expect acceleration if USD/JPY breaches either of the mentioned support/resistance levels.
USD/JPY Price Chart
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