As last week commenced, the unfortunate tragedy which occurred in Eastern Europe the Thursday evening prior led to the USDJPY appreciating at the beginning of the week. This pair’s appreciation in value accelerated on Thursday, with US Initial Jobless Claims hitting an 8-year low. The USDJPY concluded the week at its highest valuation in nearly three weeks.
In regards to the upcoming week, how much further the USDJPY can advance will be largely dependent on the reaction to Wednesday’s US GDP estimate and Friday’s Non-Farm Payroll report. On Monday and Tuesday, the latest Japanese Household Spending and Small Business Confidence readings are expected to show that the Japanese April sales tax is starting to take effect. A contraction in household spending is expected alongside a decline in Japanese Business Confidence. Bearing this in mind, the USDJPY could be set to record over 8 days of successive gains for the first time since April.
In regards to the technicals on the Daily timeframe, we remain some distance away from breaking away from the long term bearish trend line, but a short term bull has now joined the scene. Possible upcoming resistance is located around 101.987 and 102.121.
If the USDJPY experiences bearish momentum and begins to pull back towards this new short-term bull, 101.558 has been used as a frequent support level in the past.