The USD/JPY pair dropped as expected in the short term and now is trading at 133.78. Technically, the price action signaled exhausted buyers and announced a new sell-off. You knew from yesterday's analysis that the price could develop a strong drop after activating the Rising Wedge pattern.
Fundamentally, the Japanese SPPI came in worse than expected while BOJ Core CPI came in better than expected. On the other hand, the US Consumer Confidence came in at 101.3 points far below 104.1 expected, while New Home Sales was reported at 683K versus 633K expected.
USD/JPY Strongly Bearish!
USD/JPY dropped and reached the 50% (133.76) retracement level which stands as a static support. You knew from my previous analysis that the price could extend its short-term drop after taking out the Rising Wedge's support and after closing below the weekly pivot point of 134.26.
Still, the currency pair moves somehow sideways in the short term. It's trapped between the 61.8% and 50% retracement levels.
USD/JPY Forecast!
A valid breakdown below the 50% (133.76) retracement level activates more declines and represents a bearish signal.
