19.03.201811:17 Forex Analysis & Reviews: Fundamental Analysis of USD/JPY for March 19, 2018

USD/JPY has been trading quietly with the bearish trend which led the pair towards 105.50 price area with a Pre-Breakout structure. Ahead of the widely expected rate hike in the US later this week, USD was unable to push against JPY gains like other pairs in the market. Due to recent increase in Japan's Core Machinery Order to 8.2% from the previous negative value of -9.3%, the impulsive bearish pressure in the pair was quite unstoppable. Today, BOJ Summary of Opinions was quite hawkish in nature, helping JPY to maintain its momentum against USD. Moreover, Japan's Trade Balance report was published with a negative figure of -0.20T decreasing from the previous figure of 0.35T which was expected to be at -0.10T. Despite a worse Trade Balance report, JPY is still quite strong to continue its bearish pressure in the pair but likely to weaken gradually. On the USD side, today FOMC Member Bostic is going to speak about interest rates and monetary policy. His speech is expected to help USD to gain some momentum ahead of the rate hike decision on Wednesday. A good amount of volatility is expected in this pair this week. As the rate hike has been already priced in by the markets, USD is trying to recover gains over JPY, though it would not be quite easy. As for the current scenario, USD is expected to gain over JPY in the coming days amid a strong counter momentum this week. As JPY is likely to get weaker gradually, it is expected to open way for USD to recover its gains in the meantime.

Now let us look at the technical view. The price is currently residing above 105.50 support area to produce strong bearish pressure, leading the price towards 100.00 support area as well. As the trend is still non-volatile, the bears are expected to be quite strong whereas a rate hike in the US is also set to invite some bulls to the market. As the price remains above 105.50, bullish pressure is expected to hit the market in the coming days.