Weekly Technical Outlook: USD/JPY ; Market Forecasts for October 16th – October 20th

• Resistance level 720
• Pivot Level 338
• Support Level 489, 111.339 and 110.957

Technical Analysis

Daily bias in USD/JPY remains bearish with the 112.720 level resistances intact. A deeper decline is still expected for the pair as long as resistance holds the area. The price action stays below resistance so far at end of the week and such decline is viewed as a continuation. Thus, we’d expect resistance to hold the area. The pair remains bearish with break of 112.338 indicating near term bearish reversal has taken place. However, the pair is holding above the levels. This confirms break below this level are needed which shall suggest bearish reversal has taken place. The pair’s outlook turns to continue with the downside bias price action bearish movement rejection at resistance area closed below trend line. Its stochastic oscillator is currently at the 36.0 levels. The pair is closed below the rejection of trend line there is clear indication of trend reversal continuing the decline. The current development suggests that the medium term downside is expected further low. A focus shall be at the 111.489 level and break here should make lower lows 111.339 levels. We expect the pair to see further downside from the previous week

Economic

• FOMC Member Kaplan Speech, Building Permits Change
• Initial Jobless Claims, Existing Home Sales
• Exports, Adjusted Merchandise Trade Balance, Merchandise Trade Balance Total
• Foreign investment in Japan stocks, Imports

Area of Interest

• Strong resistance at 112.720 area and closed below resistance levels.
• Bearish momentum reversal strongly closing below the trend line with rejection.
• Price action closed below trend line and oscillator below 36.0 levels indicating shift in momentum.
• At Flip Area on Daily time frame resistance levels.