The USD/JPY pair drops like a rock at the time of writing. It's located at 128.21 far below 129.77 yesterday's high. The price dropped as the Dollar Index was in a corrective phase while the Japanese Yen Futures rebounded.
Fundamentally, the JPY received a helping hand from the Japanese Prelim GDP which registered a 0.2% less versus a 0.4% drop estimated, while the Prelim GDP Price Index dropped only by 0.4% compared to the 1.0% drop forecasted. In addition, the Revised Industrial Production surged by 0.3% matching expectations.
As you already know, the US Housing Starts came in worse than expected, while the Building Permits came in better than expected.
USD/JPY Sell-Off!
From the technical point of view, the USD/JPY pair failed to stabilize above the 129.40 static resistance. You knew from my previous analyses that only a valid breakout above that level may signal further growth.
I've told you that, staying below 129.10 may signal a new sell-off. Now, it challenges the median line (ml) of the descending pitchfork which stands as a dynamic support. Staying above it may signal that the sell-off ended.
USD/JPY Forecast!
Failing to stay above 129.40 followed by a valid breakdown below the median line (ml) may signal more declines. Closing and staying below the median line (ml) could bring new selling opportunities with a potential target at 127.51 key level.
A great selling opportunity was signaled by the aggressive breakdown below the 129.00 psychological level.
