The USD/JPY has retreated a little in the start of this week as the price has hit a major dynamic resistance, the price could challenge this obstacle if the US dollar index will manage to increase again after the short decrease from the last two days. The USD/JPY has rebounded in the last week as the USDX has edged higher, the pair has jumped much above the resistance area between the 110.07 and the 109.72 levels, the rebound could continue only if the price will jump above the median line (ML). The Yen has increased a little this week because the Nikkei stock index has decreased and now is retesting a dynamic sport, the index is expected to increase further, so the Yen will decrease on the short term. All Industries Activity has decreased by 1.2% in February, less than the -1.3% estimate.
We could have high volatility on the USD/JPY these days as we have major impact economic events, the Federal Reserve will publish the Federal Funds Rate today, the FOMC Statement could bring action on the currency pair. The FED is expected to maintain the rate on hold, depends on the economic conditions. The Japanese economic data that will be released tomorrow could shake the USD/JPY pair, the Japan will publish the Unemployment Rate, Retail Sales, Household Spending and many more figures. The BOJ Press Conference along with the BOJ Outlook Report and the Monetary Policy Statement will bring high volatility, remains to see how the USD/JPY will react after these economic events.
The pair remains on a declining path, but the sentiment could change on the short term if the price will jump and stabilize above the median line, the outlook remains bearish on the medium term even if the rate will jump above the median line because the price is still trapped below the 23.6% retracement level and below the upper median line (UML) of the medium term descending pitchfork. The USD/JPY price will be driven these days by fundamental factors, maybe will have a clear direction till the end of the week, the pair is located below the 112 psychological level and could drop along the median line (ML) till will reach the 110 level.
The last week rebound was expected because the price has failed to close below the swing low from 107.62 in the last attempt, has failed also to close below the sliding parallel line and most important has failed to reach the lower median line (LML) of the descending pitchfork. The USD/JPY could approach the major target from the 38.2% retracement level (106.5) if the correction phase will continue, the broader retracement could resume as long as is trading inside the descending pitchfork’s body.
The price is trading inside of a short ascending pitchfork, between the median line (ml) and the upper median line (uml), the pair has found strong resistance right above the upper median line, when has touched the major median line (ML), the perspective remains bullish on the short term as long as the price stays inside the ascending pitchfork’s body.