The USD is increasing aggressively versus the Japanese Yen, the Yen continues to decrease because most likely the BOJ will add more stimulus measures in the coming period, the USD/JPY has increased more than 400 pips in the start of this week, the rate could continue to increase in the coming days, the pair is decreasing also because the Japanese data has come worse again, on the other hand, the USD has received a helping hand from the United States economic figures, the US dollar index has recovered a little after the morning drop, but the index is still trading below the 96.70 horizontal level, any jump above this static resistance will force the greenback to jump much higher versus all its counterparts.
The Japanese Producer Price Index has decreased by 4.2% in June, more compared to the -4.1% estimate, the economic indicator continues to drop, this situation is forcing the Bank of Japan to take action again. The Tertiary Industry Activity has decreased by 0.7%, matching expectations, the indicator remains steady for the second month.
The USD has received a boost from the US data, the Wholesale Inventories have increased by 0.1%, less than the 0.2% estimate, has increased less also compared to the 0.7% increase in the previous reading period, while he JOLTS Job have decreased from 5.85M to 5.50M, moreover the NFIB Small Business Index has increased from 93.8 to 94.5 points, remains to see what will happen with the price tomorrow when the METI will release the Revised Industrial Production, the economic indicator is expected to decrease by 2.2% and could weaken the Yen.

You can see on the Daily chart that the rate has jumped unexpectedly higher in the first two days of this week, the price is approaching the 38.2% retracement level and the median line of the medium term descending pitchfork, the pair is expected to find strong resistance at these levels, remain to see how will react after will touch these obstacles. The pair has found strong resistance at the 50% retracement level and now has managed to jump again above the lower median line of the descending pitchfork, signaling that the sentiment could change on the short term, we could have a reversal if the rate will jump and close above the 38.2% retracement level and above the median line of the descending pitchfork. For now the price remains trapped inside the seller’s territory, the pair could resume the downward movement as long as is trading below the median line of the descending pitchfork, only a jump above the median line followed by a consolidation will open the door for a broader rebound.

I’ve added a minor ascending pitchfork to show you better the bounce back movement, you can see that the rate has escaped from the short descending pitchfork and now is targeting the upper median line (uml) of the minor ascending pitchfork, the perspective remains bullish as long as the price is trading inside the ascending pitchfork’s body.

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