USD/JPY continues to move sideways in the short term after failing to make new lows. The bears seem exhausted as the JP225 continues to increase. USDX's rally could force USD/JPY to return higher.
The US ISM Manufacturing PMI could shake the pair today. The economic indicator is expected to decline from 59.3 to 57.9 points signaling an expansion slowdown. The Final Manufacturing PMI, Construction Spending, and the ISM Manufacturing Prices will be released as well.
Better than expected data could boost the price, so USD/JPY could pressure the immediate upside obstacles.
USD/JPY Downside Continues To Be Limited!
USD/JPY failed to reach and retest the lower median line (lml) of the ascending pitchfork or the former lows signaling that the price is oversold and that the bulls could take full control anytime.
It's traded above the Pivot Point (104.16) level after failing to approach the S1 (103.56). Jumping and stabilizing above the R1 (104.64) could signal a potential upside breakout from the major Falling Wedge pattern.
Technically, a valid breakout above the downtrend line and above 105.00 could indicate an up reversal. In my opinion, the critical support is seen at the lower median line (lml) of the ascending pitchfork.
- USD/JPY Trading Conclusion
The direction is unclear now even if USD/JPY is still under bearish pressure as long it stays under the major downtrend line. We could have a great long opportunity if the price registers a valid breakout above the downtrend line and through the 105.psychological level.
The 107.00 and the upper median line (uml) of the ascending pitchfork could be used as upside targets.
You should know that the upside scenario could be invalidated by a valid breakdown through the lower median line (lml).
