The USD/JPY pair plunged as the USD was weakened by DXY's sell-off while the JPY was lifted by the Japanese Yen Futures' growth. You knew from my last analysis that the pair remains under pressure in the short term after failing to take out the 129.10 - 129.40 resistance area.
Today, the Japanese economic data came in mixed. The Trade Balance was reported at -1.62T below -1.52T estimates, while the Core Machinery Orders rose by 7.1% beating the 3.9% growth expected.
On the other hand, the US data came in worse than expected. Unemployment Claims indicator came in at 218K above 200K estimates, Existing Home Sales dropped to 5.61M below 5.65M forecasts, while the Philly Fed Manufacturing Index was reported at 2.6 points below 14.9 expected.
USD/JPY New Lower Low!USD/JPY extended its sell-off after registering an aggressive breakdown below the 128.00 psychological level. I've told you that dropping and stabilizing below the median line (ml) of the descending pitchfork may signal a deeper drop.
The price ignored the 127.51 lower low as well. Still, in the short term, it could come back to test and retest this level before dropping deeper. Also, the median line (ml) retest could bring new short opportunities.
USD/JPY Outlook!Stabilizing below 127.51 and under the S1 (127.39) may signal more declines. A new lower low, dropping and closing below 127.02 could bring selling opportunities with a potential downside target at the descending pitchfork's lower median line (lml).