- The USD/JPY pair could approach and reach fresh new lows after failing to reach the median line (ml) in its last attempts.
- The lower median line (lml) could attract the price if it stabilizes below the 38.2% retracement level.
- The currency pair validated its breakdown below the immediate uptrend lines, so the correction is natural.
Our USD/JPY forecast sees the pair trading in the red at 113.18 at the time of writing and it seems heavy enough to come back down.
In the short term, it has rebounded but the selling pressure remains high, the pair could drop deeper anytime. Technically, the price dropped below major downside obstacles, so the bias remains bearish. The Japanese Yen Futures have started to grow again, that’s why we have a strongly bullish Yen.
In the early morning, the Japanese Final Manufacturing PMI reported an increase from 54.2 to 54.5 points, even if the traders expected the indicator to remain steady at 54.2. The Capital Spending registered a 1.2% growth versus 1.6% expected.
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Still, it remains to see what will happen as the United States ADP Non-Farm Employment Change was reported at 534K above 524K estimates and compared to 570K in the previous reporting period.
Later, the US is to release the ISM Manufacturing PMI which is expected to grow from 60.8 to 61.3 points. Furthermore, the Final Manufacturing PMI could remain steady at 59.1 points, the Construction Spending could report a 0.4% growth, while the ISM Manufacturing Prices could drop from 85.7 to 85.5 points.
USD/JPY Forecast: Price Technical Analysis – Corrective Phase
The USD/JPY pair rebounded but it failed to reach and retest the descending pitchfork’s median line (ml). Now, it’s almost to reach the 38.2% retracement level which stands as a static support. Dropping and stabilizing below this level could signal a potential deeper drop.
As you can see on the H4 chart, it has dropped below the immediate uptrend lines. It has retested the broken levels and now it could approach and reach fresh new lows. As long as it stays under the descending pitchfork’s median line (ml), the pressure remains high.
After its failure to approach and rech the median line (ml), the USD/JPY pair could be attracted by the lower median line (lml).
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