Weekly Technical Outlook: USD/JPY; Market Forecasts for July 3rd – July 7th

• Resistance level 112.396
• Pivot Level 112.263
• Support Level 111.506, 111.090, and 110.699

Technical Analysis

Daily bias in USD/JPY remains bearish with 112.396 resistances intact and deeper decline is still expected for the pair as long as resistances holds the area. With price action staying below resistances so far, such decline is viewed as a correction.

Thus, we’d expect resistance to hold the area and the pair remains bearish where a break of 112.263 indicates that a near term bearish reversal has taken place. The pair continues with the downside bias price action at resistance area with the pin bar closed below the trend line.

The stochastic oscillator is currently at 85.0 levels and the pair has closed below the rejection of trend line. Hence, there is a clear indication of trend reversal shifting the momentum. Current developments suggest that the medium term downside are expected to be further low and the focus shall be at 111.506.

Any break here should make lower lows of 111.090 / 110.699 levels. The outlook remains bearish for the week.

Economic

• ISM Manufacturing PMI, ISM Prices Paid
• FOMC Minutes, ADP Employment Change, Trade Balance
• Initial Jobless Claims, ISM Non-Manufacturing PMI, Unemployment Rate, Nonfarm Payrolls
• Foreign investment in Japan stocks

Area of Interest

• Strong resistance at 112.396 area and closed below resistance levels.
• Bearish momentum reversal with pin bar reversal strongly closing below the trend line.
• Price action closed below trend line and oscillator below 85.0 levels indicating shift in momentum.
• At Flip Area on Daily time frame resistance levels.

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