The USD/JPY Price Has Stalled at 132.87, as Investors Await the Fed's Speech.
- The USDJPY pair only registered a false breakout above the historical level, the retreat is natural.
- The USD rose as expected following better-than-expected data on Friday.
- A new higher high stimulate additional growth.
In the short term, the USD/JPY price fell as Japanese Yen Futures recovered while the Dollar Index retreated slightly.
From Thursday's low of 128.08 to yesterday's high of 132.90, the currency pair increased by 3.76%. It is currently trading at 131.87 at the time of writing.
The price rose sharply after the US reported positive data on Friday, as expected. The NFP came in at 517K versus 193K expected, the unemployment rate fell unexpectedly from 3.5% to 3.4%, and the ISM Services PMI came in at 55.2, far exceeding the 50.5 point estimate.
Today's Japanese data was mixed. Household spending fell by 1.3%, versus the 0.3% drop expected, while average cash earnings increased by 4.8%, exceeding the 2.5% growth forecasted, and leading indicators fell to 97.2%, down from 97.4% in the previous reporting period.
Later, the US will release the Trade Balance, which is expected to be -68.5 billion versus -61.5 billion in the previous reporting period. Consumer Credit will also be made available. Still, anything can happen when Fed Chair Powell speaks. This is regarded as a high-impact event, and the USD may experience sharp movements.
Tomorrow's Japanese Current Account and Bank Lending data could also be interesting. Fundamentally, the Prelim UoM Consumer Sentiment on Friday could be the most important event of the week.
USD/JPY Price Technical Analysis:
The USD/JPY pair only registered a false breakout through the previous high of 132.87 and has now turned to the downside. After reaching the supply zone, a temporary retreat is natural.
Furthermore, it has failed to remain above the ascending pitchfork's median line (ML), indicating that buyers have become exhausted. It is now almost at the 131.57 downside barrier.
It remains to be seen how it will react in the aftermath; a valid breakdown may signal further declines. Only remaining anova it and achieving a new higher high activates additional growth.