Last week, the Japanese Yen weakened, taking into account dipping retail sales in Japan as a result of the raised sales tax back in April. Household spending slowed down as well, however, the result turned to be better than forecasted. On the contrary, the U.S. economic growth data posted a robust recovery in the April-June quarter after a decline in Q1. It forced the U.S. currency to jump above the daily R2 at 102.88. A slight bearish correction followed on Friday, when the pair reached the weekly pivot point at 102.46.
Similar to the EUR/USD currency pair, now the neutral sentiment is shown also by the USD/JPY pair. This week the currency pair may be influenced mainly by the fundamental data from the U.S., including unemployment claims and the trade balance. From the technical point of view the pair is now trading is the descending triangle pattern on the weekly graph, which still implies the decreasing trading range, meaning that the pair may stagnate for some time in the future. The market sentiment and technical data are supported by Dukascopy traders, who participated in the weekly quiz. Bullish and bearish votes are almost equally divided between the participants. Almost 37% predict the USD/JPY currency pair to remain range bound between 102.30 and 103.00 in the nearest five days. From the downside, the pair is supported by both weekly PP and daily S1 at 102.46/39. From the upside, the first resistance the pair is going to meet is located at 102.71 and is represented by the daily R1. Taking into account the lack of fundamental news from Japan this week, the traders will most likely remain indecisive and will wait for more reliable news from both countries. As khalidamassi expects "USD/JPY may consolidate between 102.25 and 103 in the next week before confirming any direction."