The USD/JPY pair dropped on the H4 chart. It is traded at 125.54 level at the time of writing. The price retreated as the Dollar Index dropped and because the Yen Futures rebounded. Still, technically, the bias remains bullish, the USD/JPY pair could resume its growth anytime.
Fundamentally, the JPY received a hit from the Core Machinery Orders indicator which dropped by 9.8% versus a 1.5% drop expected, while the M2 Money Stock rose by 3.5% less versus 3.6% expected. The Yen remains weak as the BOJ maintains its monetary policy.
On the contrary, the USD could resume its growth as the FED is expected to hike rates in the upcoming monetary policy meetings. Also, today, the PPI rose by 1.4% beating the 1.1% expected, while the Core PPI registered a 1.0% growth versus a 0.5% estimate.
USD/JPY Support Retest!
USD/JPY maintains a bullish bias as long as it stays above the uptrend line. 125.10 former high and upside obstacle turned into support. It could develop a new bullish momentum anytime if the DXY growth and the Yen Futures drop.
Technically, testing and retesting the immediate support levels, and registering false breakdowns could bring new long opportunities. Only making a valid breakdown below the uptrend line could invalidate an upside continuation.
USD/JPY Forecast!
Consolidating above the 125.10 and registering only false breakdowns below this obstacle and below the uptrend line could bring new long opportunities. Also, a valid breakout above the weekly R2 (126.15) could activate an upside continuation. 127.00 and 128.00 are seen as potential targets.
