Our USDJPY forecast sees the pair’s sell-off accelerating today and it now stands at 109.55 versus today’s high of 110.67. It has registered an approximate 0.95% drop in today’s session as the DXY and the JP225 have registered sharp falls.
The currency pair has escaped from a major up channel, signalling that the upside is over and that USD/JPY could develop a larger decline. USD/JPY is in a corrective phase which is far from being complete.
The US dollar failed to resume its appreciation after the FOMC Meeting Minutes release. Today, the US dollar has taken a hit from the Unemployment Claims data. The economic indicator was reported at 373,000 in the last week versus 345,000 expected and compared to 371,000 in the previous reporting period.
On the other hand, the Japanese Current Account increased from 1.55T to 1.87T, while the Economic Watchers Sentiment increased from 38.1 to 47.6 points, beating the 41.9 estimate.
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USDJPY forecast – technical analysis: taking out downside obstacles
The USDJPY forecast sees the pair fail to reach the ascending channel’s upside line signalling an overbought position. It has found temporary support on the weekly S1 (110.40) in yesterday’s session, but today it has edged lower ignoring all downside obstacles.
Now it is pressuring the 50% retracement level. Staying above it could signal a potential rebound in the short term. Closing below this obstacle could indicate a deeper drop towards the 61.8% retracement level.
DXY’s potential rebound could help the pair come back to retest the broken levels. Technically, it is difficult to see USD/JPY resuming downside travel without an attempt at a bounce back.
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