The USD/JPY has decreased in the morning, even if the
Japanese economic data has disappointed a little, the pair remains under
selling pressure and could drop even deeper if the USDX will slide further. The
pair hovers above a major static support, we’ll have to wait to see if will
have enough power to break below this key support as the price was rejected on
Monday, the rate has failed to reach this level in the morning, signaling that
the price is losing bearish momentum.
Technically the price is moving sideways on the short term, has failed
to reach the previous low from 105.54 and if will stay above the 106.50 level,
then we can see another leg higher on the short term, the pair will resume the
medium term corrective phase if will manage to slip below the previous low from
The Japanese Final GDP rose by 0.5% in the first quarter, matching
expectations, while the Current Account has decreased from 1.89T to 1.63T in
April, has decreased unexpectedly because the trades have expected an increase
to 2.04T. Moreover the Economy Watchers Sentiment has decreased from 43.5 to
43.0 points, much more compared to the 43.4 points estimate. The Final GDP
Price Index rose by 0.9%, has met the expectations. The US is to release the
JOLTS Job Opening later today, but I don’t think that will have any major
impact on the USD’s action.
The price stands right above
the 38.2% retracement level, the rate has rejected on Monday, but has decreased
again after has retested the lower median line of the short ascending pitchfork.
The price could approach and challenge again the 38.2% retracement level because
remains under massive selling pressure, the pair is trading deep in the seller’s
territory, a drop below the confluence area formed at the intersection of the
38.2% with the sliding parallel line (ascending dotted line) will attract more
sellers, which will drive the price toward the previous low from 105.54 level.
The SD/JPY perspective remains bearish
as long as the price is trading below the median line (ML) of the descending
pitchfork, you can notice that the rate is trapped between the lower median
line and the median line.
If you’ll look closer, you will notice that the rate has moved
somehow sideways on the short term and now is very close to reach the support of this mini
range, a fall below the 38.25 retracement level followed by a short
consolidation will open the door for more declines, the next major downside target
is at the 50% retracement level (100.64 level).
I’ve added the H4 chart to show you better the price action, you can
see that the current decrease was expected because the price has found strong resistance
at the lower median line of the ascending pitchfork, the sliding line
represents a strong dynamic support on the short term, any drop below this
minor support bring more selling pressure. Only rejection here will help the
price o increase again on the short term.
About The Post
About The Forex Analyst
Has graduated a Master in Business Administration, Trader/ Market Analyst on the financial markets (forex, commodities, index, stocks, futures, cryptocurrencies) for more than 7 years. Founder and Market Analyst at http://ovtbusiness.com/