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A risk-friendly environment made pips rain for yen bears last week. Can the bulls force retracements or reversals this time?

Here are the potential catalysts you need to watch out for:

Lower tier economic releases

  • Japan’s data don’t usually power intraweek trends, they can cause intraday retracements that can serve as good entries for day or swing trades
  • Japan’s economy shrinks at a record pace as pandemic hits spending
  • Final industrial production (Aug 17, 5:30 am GMT) expected to maintain its 2.7% reading
  • Reuters Tankan index (Aug 17, 11:00 pm GMT) to improve from -44.0 to -32.0?
  • Core machinery orders (Aug 19, 12:50 am GMT) seen jumping from 1.7% to 2.5%
  • Trade deficit (Aug 19, 12:50 am GMT) expected to narrow down from 268.8B to 120B in July
  • National core CPI (Aug 21, 12:30 am GMT) could tick higher from 0.0% to 0.2%
  • Markit’s manufacturing PMI (Aug 21, 1:30 am GMT) expected at 49.0 after July’s 45.2 reading

Market risk sentiment

  • As we saw in last week’s trading, significant hits or misses that might affect global risk sentiment can also affect JPY’s intraweek trends
  • Meeting minutes by the FOMC, ECB, and RBA can give clues on the short-term plans and sentiments of major central bankers
  • This week’s PMI reports from the European region and the U.S. will hint at the pace of global economic recovery
  • Coronavirus updates (number of cases, lockdown plans, stimulus hints, and negotiations) will continue to influence overall risk-taking and the demand for the safe-haven yen

Technical snapshot

  • Daily Keltner Channels point to the yen being “oversold” against the euro
  • JPY may soon see oversold conditions against CHF, GBP, AUD, and CAD
JPY Forex Pairs Keltner Channel from MarketMilk
JPY Forex Pairs Keltner Channel from MarketMilk
  • SMAs are showing JPY’s short and long-term bearish trends against EUR, AUD, CHF, and GBP
  • Watch for a potential reversal on NZD/JPY and a retracement opportunity on USD/JPY
JPY Forex Pairs SMAs from MarketMilk
JPY Forex Pairs SMAs from MarketMilk
    • The yen weakened the most against the Euro, Loonie, and franc in the last seven days
JPY Forex Pairs Performance from MarketMilk
JPY Forex Pairs Performance from MarketMilk

Missed last week’s price action? Read JPY’s price recap for August 10 – 14!