USD/JPY drops like a rock as the JP225 and DXY are trading in the red. Where can USD/JPY find major support, demand? We could have new short opportunities if USD/JPY comes back to test and retest the broken levels. The USD/JPY price plunged in the short term as the JP225, and the Dollar Index has dropped aggressively. It’s located at 109.31 level, and it seems very heavy, so further drop is favored. On the other hand, the Nikkei’s sell-off forced the Japanese Yen to increase versus its rivals. JP225’s further drop may signal Yen’s further appreciation. Also, the USD could depreciate if the Dollar Index drops after the current rebound. USD/JPY also because the Japanese economic data have come in better than expected today. The Revised Industrial Production increased by 6.5% versus 6.2% compared to 6.2% growth in the last reporting period. Furthermore, the Prelim GDP increased by 0.3% compared to 0.1% expected after a 0.1% drop in the previous reporting period, while the Prelim GDP Price Index dropped only by 0.7% versus 0.9% expected. The US has published only the Empire State Manufacturing Index, reported at 18.3 in August versus 28.9 estimates and 43.0 in July. Tomorrow, the United States retail sales data could bring high volatility and high action on the USD/JPY. Get FREE Forex Signals Now! USD/JPY price technical analysis: Strong sell-off to crack 109.00 USD/JPY 4-hour price chart The USD/JPY pair plunged after failing to stabilize above the ascending pitchfork’s median line (ml). Now it is pressuring the 109.16 level weekly S1. Closing below it may signal further decline. It has escaped from the ascending pitchfork’s body, signaling strong sellers. Unfortunately, the upside scenario was invalidated after dropping and closing below the downtrend line. Technically, the near-term downside obstacle is seen at a 108.72 lower low. The USD/JPY pair could find support there if it continues to drop. Also, we cannot exclude a temporary rebound in the short term after the current aggressive sell-off. This scenario could take shape if the Nikkei increased or if the DXY increased significantly again. We could only have a new short opportunity if the rate returned to test and retest the broken levels. Looking to trade forex now? Invest at eToro! Trade Forex Now! 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Saqib Iqbal Saqib Iqbal Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis. View All Post By Saqib Iqbal Majors share Read Next DXY Dollar Index Price Extends Sideways Move, Impacted by Key Data Saqib Iqbal 1 year USD/JPY drops like a rock as the JP225 and DXY are trading in the red. Where can USD/JPY find major support, demand? We could have new short opportunities if USD/JPY comes back to test and retest the broken levels. The USD/JPY price plunged in the short term as the JP225, and the Dollar Index has dropped aggressively. It’s located at 109.31 level, and it seems very heavy, so further drop is favored. On the other hand, the Nikkei’s sell-off forced the Japanese Yen to increase versus its rivals. JP225’s further drop may signal Yen’s further appreciation. Also, the USD could… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.