Red line - resistance trend line
In our previous analysis on USDJPY we noted that a bounce towards 131 was justified if price were to follow a pattern we saw many times before. Our first target from 128.50 was at 129.50. Our final target was at 131. Price made a high at 131.59. Price reached key resistance area and with the announcement of macroeconomic news from the US, selling pressures followed against the Dollar. Both PPI in the US and Retail sales results shifted traders from Dollar bullish to Dollar bearish and that is why the sharp reversal from 131.59 to 128-127. Technically, price action is bearish as price got rejected at key resistance and the Daily candlestick has a long upper tails (bearish). For a short-term trend change, bulls must recapture 131.60-132.
