FX.co ★ USD/JPY: upside invalidated, FOMC eyed

The USD/JPY pair dropped deeper as the Dollar Index crashed in the short term, while the Yen Futures rallied. It's trading at 140.44 at the time of writing above 140.15 today's low. Technically, the price action signaled a potential deeper drop. Still, we need strong confirmation before taking action.

Yesterday, the US CB Consumer Confidence came in better than expected, but the USD ignored US economic data. Today, the focus turns on the FOMC. The FED is expected to increase the Federal Funds Rate by 0.25%. Earlier, the USD took a hit from the US data. The New Home Sales came in at 697K versus 726K expected.

USD/JPY In The Sellers' Territory!

As you can see on the H1 chart, the rate failed to activate the flag pattern. The rate dropped below the pattern's downside line signaling more declines. It has ignored the 140.73, the pivot point of 140.48, and the warning line (wl1) downside obstacles as well.

Now, it has tested and retested the warning line (wl1) and the weekly pivot point of 140.48 which represent immediate resistance levels.

USD/JPY Forecast!

The 140.15 today's low represents a key support. A bearish closure below this level opens the door for a larger drop. This is seen as a bearish signal.