FX.co ★ Fundamental Analysis of USD/JPY for June 5, 2018

USD/JPY has been quite impulsive with the bullish gains after bouncing off the 108.50 area recently which is being continued quite well. After the recent positive employment reports published on Friday, the impulsive momentum of USD over JPY was quite remarkable and is expected to push much higher in the coming days.

Today USD Final Services PMI report is going to be published which is expected to be unchanged at 55.7, ISM Non-Manufacturing PMI report is expected to increase to 57.9 from the previous figure of 56.8, JOLTS Job Opening is expected to decrease to 6.49M from the previous figure of 6.55M and IBD/TIPP Economic Optimism is expected to increase to 54.2 from the previous figure of 53.6.

On the JPY side, recently a Monetary Base report was published with an increase of 8.1% from the previous value of 7.8% which was expected to decrease to 7.4%. Today JPY Household Spending report is going to be published which is expected to increase to 0.8% from the previous value of -0.7%. Though the forecast is quite optimistic but having a positive outcome of this economic report is not expected to outrun the USD bias in the market for the upcoming few days.

As of the current scenario, USD is expected to gain further over JPY for the coming days which might lead to certain bullish momentum in the pair. Though the sustainability of the USD gains is not yet guaranteed as JPY has been performing quite well fundamentally but for the short to medium-term momentum, USD is expected to take the lead.

Now let us look at the technical view. The price is currently quite impulsive with the bullish gains above the dynamic level of 20 EMA which is expected to proceed further with target towards 110.50 in the coming days. Though the recent bearish pressure quite impulsive with the momentum as the price proceed towards 110.50 there should not be any strong barrier for it. In future, if the price breaks above 110.50 with a daily close, further bullish pressure can be observed in the market with target towards 112.00 area. As the price remains above 108.50 area, the bullish bias is expected to continue.