- The USD/JPY pair could resume its growth after ending the current retreat.
- Technically, the decline could bring fresh long opportunities.
- Failing to close below the 23.6% retracement level, the USD/JPY pair is somehow expected to resume its uptrend.
The USD/JPY forecast sees the pair rise to 114.44 level today where it has found temporary resistance. Technically, the currency pair escaped from a continuation pattern, so it is still expected to resume its growth. Still, in the short term forex day traders will appreciate that a temporary decline was to be expected after its most recent rally.
Fundamentally, the Yen received a helping hand from the Japanese Final Manufacturing PMI which was reported at 53.2 above 53.0 expected and versus 53.0 in the previous reporting period.
Now, the USD/JPY is fighting hard to come back higher after mixed US data. JP225, the Nikkei, is bullish, further growth could force the Japanese Yen to depreciate versus its rivals.
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Unfortunately for the USD, the United States economic data have come in mixed today. The ISM Manufacturing PMI which was seen as a high impact event was reported at 60.8 points above 60.4 points expected. In addition, the ISM Manufacturing Prices jumped from 81.2 to 85.7 points, exceeding 82.5 forecasts.
On the other hand, the Construction Spending registered a 0.5% drop, even if the specialists have expected a 0.6% growth, while the Final manufacturing PMI dropped from 59.2 to 58.4 points far below 59.2 expected.
USD/JPY Forecast: Price Technical Analysis – Continuation Pattern
The USD/JPY pair escaped from the down channel, from the flag pattern signalling strong upside pressure. In the short term, it has found resistance at the weekly R1 (114.44) and at the uptrend line.
As you can see, the rate registered only a false breakout with great separation through the uptrend line signalling exhausted buyers.
Technically, it could slip lower to test and retest the broken downtrend line and the 113.98 static support (resistance turned into support). Also, the weekly pivot point of 113.85 stands as a downside obstacle. The current retreat could help us to catch new long opportunities.
Technically, the pair invalidated a corrective phase after failing to close below the 23.6% retracement level.
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