FX.co ★ USD/JPY: upside uncertain

The USD/JPY pair dropped a little in the short term as the Dollar Index retreated while the Japanese Yen Futures rallied. It's trading at 147.23 at the time of writing, far below today's high of 147.87. The price action signaled exhausted buyers but it's premature to talk about a broader drop.

Surprisingly or not, the greenback depreciated even if the US ISM Services PMI, Trade Balance, and the IBD/TIPP Economic Optimism reported positive data yesterday. Today, the Japanese Leading Indicators came in at 107.6% versus 107.9% expected and compared to the 108.9% in the previous reporting period.

Still, the USD is trying to rebound and recover as the US Unemployment Claims indicator came in at 216K versus 232K expected, Revised Unit Labor Costs rose by 2.2% beating the 1.8% growth estimated, while Revised Nonfarm Productivity matched expectations. Tomorrow, Japan is to release important economic data in the early morning, so the volatility could be high.

USD/JPY Fresh Range!

Technically, the USD/JPY pair failed to take out 147.80 in the last attempt announcing exhausted buyers. You knew from yesterday's analysis that only staying above the median line (ml) and making a new higher high activates further growth.

As you can see on the H1 chart, the rate registered a false breakout through 147.80 and now it has dropped below the median line. It stands right above 147.01 which represents a static support.

USD/JPY Outlook!

A bearish closure below 147.01 activates more declines and is seen as a new selling opportunity. False breakdowns below this static support may announce a new bullish momentum.