The USD/JPY has decreased significantly in the previous three days, has reached new lows in yesterday’s session, but has squeezed a little in the US trading hours, the rate has decreased today, but is till trading above the yesterday’s low, could drop further if the USDX will drop deeper. The US dollar index has plunged in the last hours and the greenback is expected to slip lower, only the US data could save the currency from downside, remains to see if the economic figures will come better or will continue to come worse.
The Yen has increased even if the Japanese data have come mixed today, the Final Gross Domestic Product has increased by 0.2%, more than the 0.0% estimate, while the Final GDP Price Index rose by 0.7%, less than the 0.8% prediction. The Japanese Current Account has decreased unexpectedly lower, from 1.65T to 1.45T, has come in much below the 1.59T estimate, but the Yen has ignored this poor data and has increased further versus the greenback, moreover the Bank Lending rose by 2.0%, less compared to the 2.1% in the previous reading period.
Remains to see what will happen because the Nikkei stock index is retesting a broken resistance level (16931), a bounce back will force the Yen to decrease again versus all its rivals, not only against the USD.
The United States economic data could bring some action on this pair, the US is to release the Unemployment Claims report, the Jobless Claims could increase from 263K to 264K in the previous week, the greenback needs a bullish spark, so only a significant drop will help the US dollar to rebound and to recover versus its counterparts. The ECB Press Conference could bring some action on all currency pairs, remains to see direction, a dovish speech will send the USD higher.

The price has decreased and has escaped from the ascending pitchfork, could approach the 50% retracement level if the USDX will slide further, personally I’m expecting to see a short retest of the broken lower median line (lml) of the ascending pitchfork. The USD/PY remains under selling pressure as long as is located below the median line (ML) of the descending pitchfork, could approach even the lower median line (LML) of the medium term descending pitchfork if the US data will continue to come in worse, the sentiment wil change only if the rate will have enough energy to jump above the median line (ML) of the major descending pitchfork. The rate is moving somehow sideways on the short term, only another rejection from the 50% retracement level and from the 100.00 psychological level could send the rate higher again, otherwise the rate could touch fresh new lows in the next week.

I’ve added a short ascending pitchfork on the H4 chart, you can see that the rate has found resistance right above the upper median line (uml) of this pitchfork and now is expected to reach the lower median line (lml) where he could find temporary support.

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