The US Economic Calendar for the week of May 7 will focus on key indicators such as jobless claims, consumer sentiment, and the Federal Reserve. On Tuesday, the RCM/TIPP Economic Optimism Index is expected to increase from 43.2 to 44.1 in May.
Recent indicators like the ISM Services PMI suggest a potential slowdown in the US economy. However, positive numbers could boost confidence in avoiding a recession. A figure below 50 shows pessimism towards the economic outlook.
Thursday will see a close watch on the US labor market, with higher jobless claims potentially affecting buyer demand for the USD/JPY. Weaker labor conditions could impact wage growth and consumer confidence, leading to a decrease in consumer spending and softer inflationary pressures.
On Friday, the Michigan Consumer Sentiment Survey is forecasted to fall from 77.2 to 77.0 in May. Weaker consumer sentiment could signal lower consumer spending, affecting inflation and supporting a more dovish Fed rate path.
Investors should also pay attention to FOMC member speeches throughout the week, as reactions to inflation numbers and the US Jobs Report could influence market movements.
In terms of short-term forecasts, USD/JPY trends will depend on data from Japan’s services sector, wage growth, and household spending, as well as factors like US labor market data and Fed chatter.
In USD/JPY price action, the currency pair is currently above the 50-day and 200-day EMAs, indicating bullish signals. A move towards the 160 level is possible if the 155 handle is reached, with a break above 160 potentially leading to higher highs. However, a drop below the 50-day EMA and support level of 151.685 could bring the pair below 150, as suggested by the 14-day RSI at 45.90.