The USD/JPY pair rallied in the short term as the Japanese Yen Futures registered a strong sell-off on Friday. On the other hand, the USD edged higher as the Dollar Index resumed its growth. It's trading at 132.59 at the time of writing far above Friday's low of 129.79.
Tomorrow, the fundamentals should move the price. The Japanese Revised Industrial Production is expected to report a 0.1% drop, Prelim GDP may announce a 0.5% growth, while Prelim GDP Price Index is forecasted to report a 1.1% growth.
Still, the US inflation figures could be decisive tomorrow. The CPI could report a 0.5% growth in January versus the 0.1% in December, while Core CPI is expected to register a 0.4% growth versus the 0.3% growth in the previous reporting period. Most likely, the economic data should bring sharp movements. Higher inflation could boost the greenback.
USD/JPY Retesting The Median Line!
Technically, the rate failed to stay below the 130.46 former low signaling that the downside movement ended. Now, it has jumped above the median line (ml) of the ascending pitchfork and is almost to reach the 132.87 historical level which represents a static resistance.
The weekly R1 of 132.87 represents an upside obstacle as well. Still, after the current rally, a minor retreat or a consolidation is in cards.
USD/JPY Forecast!
Staying above the median line (ml) and making a valid breakout through the 133.00 psychological level, taking out the 132.87 resistance and the R1 activates further growth. This is seen as a bullish signal with an upside target at R2 (134.48).
