USD/JPY dropped again signaling that the sellers are very strong in the short term. The pair dropped even if the DXY (US Dollar Index) has increased. The Japanese Yen is strongly bullish in the short term as the Nikkei (Japanese stock index) drops like a rock.
It remains to see how the pair may react around the BOJ. The bias is bearish, so poor US retail sales figures could help the pair to resume its decline. Also, the DXY has printed a Rising Wedge pattern after indicating bearish divergence.
USD/JPY BOJ In Focus!
USD/JPY dropped after retesting the 38.2% retracement level. Technically, the pair could drop deeper after its failure to stay above the uptrend line. The 50% retracement level is seen as support, it could reach this level soon again.
The pressure is high, we had only a temporary rebound. Still, a larger correction could be activated by a new lower low, if the price drops and closes below 109.53.
Trading Conclusion!
The 38.2% retest, followed by the strong sell-off was seen as a selling signal. Dropping below 109.71 immediate low activates a drop towards 50% retracement level, 109.56.
