After the bullish start of the year, the rand has started to weaken since the last Thursday. Let’s point out the main factors affecting the ZAR and set the key levels for this week’s trading.
USD/JPY: outlook for May 29 - June 2
USD/JPY has posted slight gains in the first half of past week as political tumult over Trump's obstruction of justice subsided. The yen regained its momentum following the release of the FOMC meeting minutes that conveyed a less hawkish tone than traders had expected. Fed’s policymakers demanded more evidence that the recent slowdown in the US economy was temporarily before raising interest rates. On Friday, the yen has strengthened following the release of solid inflation figures out of Japan. Japan’s core consumer prices rose for a fourth month in April which it the longest rally of gains since mid-2015.
Traders will continue searching for confirmation of the Fed’s June rate hike next week. First, they will pay attention to the US consumer confidence report, US Chicago PMI and pending home sales all coming in the first half of the week. The US unemployment claims, ADP report and manufacturing figures will be awaited on Thursday. Friday will be marked with the US labor market report. From Japan, we will get jobless rate, core inflation figures and retail sales on Monday, final manufacturing PMI on Thursday and consumer confidence report on Friday. Following the US Memorial Day scheduled for the 29th of May, the investigations into Russia’s meddling into the US election and any ties with Trump campaign will probably be renewed. This might increase the demand for safe-haven yen and hurt the yen.
The current technical outlook for the USD/JPY is still neutral. The weekly moves over the past few days have been quite muted. In the short term, the prices will likely trade in the cloudy area of Ichimoku indicator on the daily chart. A break of the horizontal Senkou Span B located at 111.80 will open the way towards the resistance at 112.50. A drop below the lower border of the 110 – 113.10 consolidation range might send quotes to test lower supports at 109.60, 108.70.
If we look at the daily charts of the US dollar index and the USD/JPY pair, we will see a misleading trend.
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