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With just one week left before the decisive move from the Japanese government, which will raise its consumption to 8% from the current level of 5%, and hawkish comments from the Fed, the USD/JPY pair has all chances to perform another rally. During the first months of 2014, the pair, however, was mostly moving to the downside, even approaching an important psychological level of 100 on February 4. After then, however, the pair regained some of the earlier losses.
Traders believe the pair will continue its cautious movement to the upside, with the consensus forecast standing for 102.39, just 6 pips above the daily pivot point. Furthermore, 64% of respondents are having bullish view on the pair, while the fact the greenback is bought in 61% of all cases across the board, is bolstering the case for pair's appreciation this week. In addition to that, 68% of all pending orders are placed to buy the pair, meaning even in a longer term the pair is projected to appreciate. Last year, analysts were claiming USD/JPY will be one of this year's top performers, climbing even above 112. While vast majority of traders support bullish scenario, Juandata expressed his concerns about the sustainability of the possible rally. "This pair has a lot of problems to start a new trend. There are a lot of resistance and support lines that come across every upside/downside movement, so the pair should continue on this trend until triangles start to appear and a breakout happens. I think that a bullish leg will be the next movement, but it is hard to forecast if it happens this week. I see the maximum at 102.78 and minimum at 102.10."
While U.S. statistics is poised to show economy's strength, disappointing inflation figures from Japan can provoke a massive sell-off of the Japanese currency, as it will intensify speculations of another round of the stimulus from the Bank of Japan.
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