The USD/JPY pair dropped a little in the short term as the Dollar Index plunged while the Yen Futures rebounded. It was traded at 143.99 and it could still register a larger retreat after its strong rally.
Fundamentally, the Japanese data came in mixed today. Bank Lending rose by 1.9% matching expectations, the Current Account was reported at -0.63T worse compared to 0.06T, the Final GDP Price Index dropped only by 0.3% versus the 0.4% drop expected, while the Final GDP registered a 0.9% growth exceeding the 0.7% growth forecasted.
Furthermore, the Unemployment Claims indicator was reported at 222K below 234K expected.
USD/JPY Flag As Continuation Pattern!
Technically, the USD/JPY pair dropped after failing to stay above the weekly R3 of 144.68 level. Now, it has developed a flag pattern that could represent a bullish continuation formation.
After its amazing growth, a temporary drop was natural and expected. The rate could test and retest the near-term downside obstacles before resuming its upwards movement.
USD/JPY Forecast!
Coming back to test and retest the R2 (142.74) and the uptrend line could bring new long opportunities as the price could develop a new bullish momentum.
Also, a valid breakout from this minor flag could activate further growth. Jumping and stabilizing above the R3, a new higher high may confirm more gains as well.
