The Japanse Yen has started to increase again versus the US dollar after the last week rebound, the USD/JPY has increased at the beginning of this week as well, but the bears have taken control again and have erased the early week gains. The Yen has decreased a little in the start of this week because the Japanese economic data has come in much worse than was expected, the Unemployment Rate has increased from 3.2% to 3.3% in February, moreover the Retail Sales have increased only by 0.5% in February even if the forecast was 1.6%. The Prelim Industrial Production has plunged by 6.2%in February, exceeding the -5.8% estimate, has decreased sharply compared to the 3.7% growth in January. The poor economic data have weakened the Yen, the currency has decreased versus all its rivals, the Nikkei stock index has opened this week with a gap up, this situation has pushed the Yen lower as well.
The Japanese Yen has rebounded and have recaptured ground in the last two days, the USD/JPY has decreased today and is approaching yesterday’s low, the Nikkei stock index has fallen aggressively in the Asian session, remains to see what will happen after the US economic data will be released.
You can see that the currency pair has started a broader corrective phase after taking out the major support from the uptrend line, the price has tested the broken line and has resumed the retracement. The USD/JPY is declining inside of a descending pitchfork, the price is located below the median line of this pitchfork, signalling that the price strongly bearish, you can notice that the buyers have attempted several times to push the price above this dynamic resistance, but with no luck.
On the Daily chart you can see the price action much better, the pair is trapped below the 23.6% retracement level, the price has failed several times to consolidate above this major horizontal resistance, the outlook is bearish on the short term. The price could retest the median line (ML) of the descending pitchfork before will make new lows. We have a consolidation on the Daily chart, the price is moving somehow sideways, the price has failed to reach the resistance of this range and now is heading toward the previous low from 110.66.
The USD/JPY has slipped lower this morning because the Japanese Housing Starts have surged unexpectedly, the economic indicator has increased by 7.8% in February, much higher compared to the 0.2% growth from January, the data has come much better than the -2.2% forecast. The pair has stalled in the last hours, maybe we need another bearish spark to be able to see the price even lower, most likely will have some action after the United States economic data will be released, the Department of Labor will publish the Unemployment Claims later, the initial claims could increase from 265K to 266K jobs in the last week. Any disappointment from the US figures could send the greenback even lower against all its counterparts.