- The weekly pivot point stopped the upside movement.
- The uptrend line represents a major downside target.
- The US reported mixed economic data today.
The USD/JPY price returned to the downside, trading at 134.61 while writing. The fundamentals moved the markets today.
In the short term, the currency pair also rallied because the US NFP, Unemployment Rate, and Average Hourly Earnings came in better than expected on Friday.
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Also, the Japanese Yen took a hit from the Japanese economic data yesterday. The Household Spending and Average Cash Earnings came in worse than expected. Furthermore, the Leading Indicators indicator was reported at 97.5% versus 97.9% in the early morning.
Still, the US inflation data was decisive earlier. The Consumer Price Index reported 0.4% growth matching expectations, while Core CPI rose by 0.4%, beating the 0.3% growth estimated. In addition, the CPI y/y came in at 4.9%, below the 5.0% estimates.
Tomorrow, Japan will release Economy Watchers Sentiment, Current Account, Bank Lending, and BOJ Summary of Options data.
On the other hand, the US is to release the PPI, Core PPI, and Unemployment Claims. The BOE could have a big impact on the financial markets as well.
USD/JPY price technical analysis: Upside overshadowed
Technically, the currency pair rebounded after finding support at the 50% (133.72) retracement level. The bounce back has ended, and the price seems heavy again.
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The bullish momentum stalled by the weekly pivot point of 135.36. Stabilizing below the 38.2% (134.68) retracement level may announce more declines, at least towards the 50% retracement level and down to the uptrend line. We can see a significant fall only after taking out these support levels.
Retesting the immediate support levels and registering only false breakdowns may announce that the sell-off is over. This scenario could announce a new bullish momentum.
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