02.10.201817:04 Forex Analysis & Reviews: Fundamental Analysis of USD/JPY for October 2, 2018

Long-term review

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USD/JPY has been quite impulsive with the bullish gains.The pair is expected to retrace back towards 113.00 area before pushing higher afterwards. Ahead of the NFP reports this week, USD is expected to lose certain grounds in the process for a short period of time before it resumes the overall upward bias.

As JPY has been quite slow with the progress recently which led the currency to lose some grounds against USD. However, today economic data from Japan revealed mixed results, which lead to certain bearish pressure in the pair throughout the day. Today Japan's Monetary Base report was published with a decrease to 5.9% from the previous value of 6.9% which was expected to increase to 7.1% and Consumer Confidence report was published with an increase to 43.4 from the previous figure of 43.3 which was expected to decrease to 43.0.

On the other hand, ahead of NFP reports this week USD is trading with indecisive momentum. Today FED Chairman Powell is going to speak about the central bank's plans for further monetary tightening. In light of the recent rate hike from 2.00% to 2.25%, USD gained good momentum against all the majors which is expected to continue further though certain correction and retrace can be observed along the way.

Meanwhile, USD is still the strongest currency in the pair whereas JPY is expected to struggle further in the process though certain short-term gains may be observed in the coming days. Ahead of high impact US economic reports, USD is expected to be quite volatile, but better-than-expected figures are likely to trigger more impulsive pressure in the future.

Now let us look at the technical view. The price is currently quite bearish with the momentum which is expected to lead to certain retrace towards 112.50 to 113.00 support area before pushing higher with target towards 114.50-115.00 resistance area in the coming days. As the price is residing quite away from the mean 20 EMA, the price has greater probability to retrace lower before pushing higher to continue with the trend. As the price remains above 112.00 area, the bullish bias is expected to continue.

SUPPORT: 112.00-50, 113.00

RESISTANCE: 114.50, 115.00

BIAS: BULLISH

MOMENTUM: VOLATILE

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