The USD/JPY pair was traded at 115.84 at the time of writing. Today, it has climbed as high as 116.33, failing to hit 116.35 static resistance. In the last hours, the volatility was high, so it's risky to catch a good trade in these circumstances.
The currency pair dropped as the Dollar Index erased today's gains while the Japanese Yen Futures rebounded boosting the JPY. Today, the Japanese PPI rose by 8.6% versus 8.2% growth expected. On the other hand, the US released its inflation data which had a high impact on the financial markets. The CPI rose by 0.6% in January versus 0.4% expected, while the Core CPI registered a 0.6% increase exceeding the 0.5% estimates.
USD/JPY trading in the red
USD/JPY extended its growth after ignoring the 115.68 static resistance. After its amazing rally, a temporary drop is natural. In my opinion, the rate could still try to approach and reach the 116.35 former high. In the short term, it could test and retest the R1 and the 115.68 level before trying to come back higher.
DXY's deeper drop could make the greenback weaker. It remains to see how the Japanese Yen Futures will react as the bias remains bearish. Technically, USD/JPY's consolidation above 115.68 or a strong continuation pattern could announce a new bullish momentum.
USD/JPY prediction
The bias remains bullish despite the current retreat. As long as it stays above 115.68 and above the warning line (WL1), the pair could try to resume its growth. Still, an upside continuation could be activated only by a valid breakout above 116.35.
A minor down channel or a strong range could represent bullish patterns. A temporary drop could bring new long opportunities.
