The USD/JPY has rebounded in this week and is trying to recover after the massive drop from the previous week, the price has increased in the Asian session and could continue as the US dollar index looks determined to rebound as well on the short term. The currency pair has declined sharply in the last week, somehow expected as the price has failed to stay above the median line (ML) of the descending pitchfork, has also failed to close above the 23.6% retracement level after several attempts. The perspective remains bearish on this pair even if will have a short term bullish momentum, the pair could increase further because the Nikkei stock index has found strong support and now edges higher on the short term, the USD/JPY could increase to test the horizontal resistance from 110.07 and also the median line (ML).
The correction phase could continue in the coming period, the major target remains at the 106.53 (38.2% retracement level), we have a strong support at the confluence formed at the intersection of the lower median line (LML) with the 38.2% retracement level (106.53 level). A rebound is expected because the price has failed once again to reach the lower median line of the descending pitchfork, the price is trading above the sliding parallel line (dynamic support) right now because the bears were unable to keep the price below this dynamic support. We could have some volatility today after the United States economic data will be released, the greenback could receive a helping hand from the Retail Sales data, the Retail Sales indicator may increase by 0.1% in March, could increase again after the 0.1% drop from February.
The US Core Retail Sales could increase by 0.4% in March, much higher compared to the -0.1% in February. Moreover the Producer Price Index is forecasted to increase by 0.3% in March, while the Core PPI may increase by 0.1%, the United Sates data could boost the US dollar if will come in line with expectations or better.
The Japanese Yen has taken a blow from the Producer Price Index, which has dropped by 3.8%, has decreased much more compared to the -3.5% estimate. The Japanese PPI has decreased further and have reached the lowest level of the last 5-months.
The currency pair is challenging the Friday’s high from 109.09 and most likely will jump above this minor resistance level, the next upside target is at the 110.07 level, where he could find strong resistance. The price could move sideways in the coming days till will reach again the median line (ML), the outlook remains bearish as long as the price is trapped below this dynamic resistance.
The USD/JPY is consolidating on the H1 chart, is moving sideways below the 109.09 minor resistance, the price could increase further if will continue the short term bullish momentum. The price is moving higher between the lower median line (lml) of the short term ascending pitchfork and the 150% Fibonacci line, could increase along the lower median line (ml), could become strongly bullish if will jump and stabilize inside the pitchfork’s body.