- The USD/JPY pair maintains a bullish bias despite the current retreat.
- After its strong growth, a sell-off is natural.
- 144.99 stands as an important upside target.
The USD/JPY price rallied in the short term as the greenback boosted while the Japanese Yen remained on the back foot.
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After its current growth, we cannot exclude a potential drop. As you already know, the price crashed last week after the BOJ and the Japanese government intervened in the FX market. Still, the Yen remains bearish versus the USD as the FED continues to hike rates while the BOJ maintains its monetary policy.
Yesterday, the Japanese Flash Manufacturing PMI came in at 51.0 points compared to 51.3 points. Today, the SPPI reported a 1.9% growth compared to the 2.4% estimated.
Later, the fundamentals will drive the market. The US is to release high-impact data. The CB Consumer Confidence is expected at 104.0 points above 103.2 in the previous reporting period. New Home Sales could drop from 511K to 500K, Richmond Manufacturing Index is expected at -10 points, and Durable Goods Orders may report a 0.1% growth.
In contrast, Core Durable Goods Orders could register a 0.3% growth versus the 0.2% growth in the previous reporting period.
In addition, Fed Chair Powell Speaks could have an impact as well. Tomorrow, the Japanese Monetary Policy Meeting Minutes could move the price.
USD/JPY price technical analysis: Swing higher
Technically, the USD/JPY pair almost reached 144.99 static resistance. After a strong uptrend, the price fell below the ascending trendline amid mild profit taking. The pair has tested the ascending trendline, which now seems under selling pressure.
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In the short term, it could come back to test the near-term support levels before trying to develop a new bullish wave. Personally, I’m expecting to see an extended sideways movement. The 145.90 higher high represents an upside obstacle, while the 140.34 is a support level.
The weekly pivot point of 143.18 stands as an important near-term downside obstacle. Consolidating above this level may announce a new upside movement towards 144.99 and up to 145.90.
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