The USD/JPY is going down aggressively and looks determined to reach new lows till the end of the day as the US dollar index has plunged after the United States data were released. The currency pair has increased in the morning and has jumped above the 111.93 yesterday’s high, but was stopped by the 112.19 level. Right now is trading near the 111.30 level and could resume the retreat if the USDX will drop further in the coming hours.
The USDX has increased in the first part of the day, but has found strong resistance right above the 100.54 upside obstacle and now is trading in the red. A USDX’s drop was somehow expected after the last day’s impressive rally, could drop to retest the 99.84 static support before will increase again.
The Yen has edged higher also because the Nikkei stock index has plunged today and now is trading below an important dynamic support, a valid breakdown will open the door for more declines, this situation will send the Yen much higher versus its counterparts.
The Yen has decreased a little in the morning as the Japanese data have come in mixed, the House Hold Spending dropped by 3.8%, more versus the 1.6% estimate, while the Housing Starts have decreased by 2.6%, much more compared to the 1.2% estimate, the indicator has decreased again after the 12.8% growth in the previous reading period. The Tokyo Core CPI dropped by 0.4%, more versus the 0.2% estimate, while the National Core CPI rose by 0.2%, matching expectations.
We had also some good figures from Japan, the Unemployment Rate has decreased unexpectedly, from 3.0% to 2.8%, while the Prelim Industrial Production surged by 2.0%, more versus the 1.3% estimate.
The greenback was weakened by the mixed US data, the Personal Spending rose only by 0.1%, less versus the 0.2% estimate, while the Personal Income has come in line with expectations. The Core PCE Price Index surged by 0.2%, matching expectations, but unfortunately the Revised UoM Consumer Sentiment has decreased from 97.6 to 96.9 points.
The Chicago PMI surged to 57.7 points, from 57.4 points, has increased surprisingly as the estimate was 57.2 points.

USDJPYdaily-1

The rate has decreased in the last hours and now is located right below the 38.2% retracement level, remains to see what will happen in the coming hours and where will close the week. Has increased in the last days because has found strong support at the 110.63, technically is somehow expected to increase further after the failure to reach the third warning line (wl3) of the former ascending pitchfork. Remains somehow under pressure as long as is trading below the second warning line (WL2) of the major descending pitchfork.

USDJPYh4

I've drawn a minor pitchfork on the H4 chart to show you better what's happening, the has decreased also because has found strong resistance at the upper median line (uml) of the minor ascending pitchfork, a valid breakout below the median line (ml) will attract more sellers, the downside target is at the lower median line (lml).

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