Fundamental Analysis of USD/JPY for November 7, 2017

USD/JPY has been trading in a volatile and corrective manner towards the resistance area of 114.25-50 from where the price is currently expected to show some bearish move. JPY has been quite impulsive with the recent gains which has led to a strong bullish rejection. Today Japan's Average Cash Earnings report was published with an increased value of 0.9% from the previous value of 0.7% which was expected to decrease to 0.6%. The positive economic report from Japan did not quite help the currency to keep the momentum but any weakness in the upcoming US economic report may lead to further bearish pressure in this pair. On the USD side, today IBD/TIPP Economic Optimism report is going to be published which is expected to increase to 51.2 from the previous figure of 50.3, JOLTS Job Opening report is expected to post a decrease to 5.98M from the previous figure of 6.08M, Consumer Credit report is expected to show significant growth to 18.4B from the previous figure of 13.1B. Besides, FOMC Member Quarles is going to speak today on interest rate plans and future monetary policy. His speech is expected to be hawkish for the currency as he has been in favor of stepping back from some banking regulations. If he holds to his point, USD is expected to gain momentum. Along with these economic reports and events, Fed Chair Janet Yellen is going to speak today about interest rates and monetary policy. She is likely to disclose her retirement on February 2018 from the pffice. As for the current scenario, USD is expected to gain momentum against JPY if the economic reports and events come positive today. Otherwise, we might see further JPY pressure in the pair if the upcoming economic reports this week may help the currency to push the price lower. The market situation is currently quite uncertain ahead of the upcoming Fed Rate Hike in December.

Now let us look at the technical chart. The price is currently residing below the 114.25-50 resistance area whereas the recent bearish move with strong bullish rejection indicates that JPY is currently trying to push the price lower. We can also see a Bearish Continuing Divergence developing throughout the volatile bullish gain which indeed indicates the lack of a bullish volume in the market and upcoming bearish pressure in the pair. As the price remains below 114.25-50 resistance area, the bearish bias is expected to continue with a target towards 111.60 support area.

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