The USD/JPY pair rebounded in the short term after reaching 137.65. It was trading at 139.43 at the time of writing. Technically, the rate moves sideways, so escaping from this formation could bring new opportunities.
Fundamentally, the Japanese and the US data came in mixed today. The Japanese Revised Industrial Production dropped by 1.7% versus the 1.6% expected, Prelim GDP dropped by 0.3% even if the traders expected a 0.3% growth, while Prelim GDP Price Index fell by 0.5% versus 0.6% forecasts.
On the other hand, the US Empire State Manufacturing Index came in better than expected, while PPI and Core PPI reported worse than expected figures.
USD/JPY Rebound!From the technical point of view, the USD/JPY pair is trapped between 138.45 and 140.79 levels. As you can see on the H1 chart, it has registered only a false breakdown below 138.45 and now it has turned to the upside as the DXY rebounded.
Now, it challenges the channel's downside line. Failing to stay below this level may signal that the downside movement could be over.
USD/JPY Forecast!The false breakdown below the range's support of 138.45 may announce an upside breakout from this pattern. Stabilizing above the downside line and making a new higher high, a valid breakout through 140.79 activates an upside continuation and brings new long opportunities with a potential target at the downtrend line.
A valid breakdown below 138.45 validates more declines.