The USD/JPY pair plunges at the time of writing as the Dollar Index dropped while the Japanese Yen Futures rallied. Technically, the price action signals that the swing higher is over and that the price could come back down.
Fundamentally, the US and the Japanese economic data came in mixed today. The Japanese Housing Starts rose by 2.1% less versus 2.2% expected, the Prelim Industrial Production dropped by 1.3% versus 0.6% growth expected, while the Retail Sales registered a 1.6% growth versus 1.5% expected.
On the other hand, the USD was punished by the Chicago PMI and by the Goods Trade Balance indicators which reported worse than expected data.
USD/JPY Bearish Momentum!
As you can see on the h4 chart, the pair registered only a false breakout above the upper median line (UML) signaling that the leg higher is over. The aggressive breakdown below the median line (ml) signaled a potential sell-off.
Now, it challenges the weekly pivot point of 115.22. As long as it stays above it may announce that the USD/JPY pair could try to come back to test and retest the upper median line (UML) again.
USD/JPY Prediction!
A larger downside movement could be announced by a valid breakdown below the 115.01 and through the lower median line (lml) of the ascending pitchfork.
Staying above the 115.22 weekly pivot point and within the ascending pitchfork followed by a valid breakout above the upper median line (UML) could bring new long opportunities.
