USD/JPY Further Drop Expected

    • The downside was reactivated after USD droped under the lower median line (lml)!

The pair is trading in the red as the USDX continues to drop weakening the greenback. The bearish bias remains intact as the rate failed to develop a reversal pattern.

The USD continues to drop after the US poor retail sales data, the Retail Sales dropped by 1.1%, versus 0.3% expected, while the Core Retail Sales indicator dropped unexpectedly by 0.9%, even if the specialists have expected to see a 0.1% growth. Also, the Flash Services PMI decreased from 58.4 to 55.3 points, below 55.7 expected signaling an expansion slowdown.

Today, the US is to release the Unemployment Claims, Philly Fed Manufacturing Index, Building Permits, and the Housing Starts but is hard to believe that the sentiment will change.

USD/JPY Downside Confirmed!

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USD/JPY goes down after failing to approach and reach the major downtrend line. The breakdown through the lower median line (lml) was validated by the most recent spike higher.

I've told you in my previous analysis that USD/JPY should drop deeper if escapes from the ascending pitchfork's body. The next major downside target is seen at the downside line, around the S3 (102.91).

    • USD/JPY Trading Conclusion

Closing under 103.26 represents a selling signal. USD/JPY could continue to drop towards the Falling Wedge's downside line and towards the first warning line (wl1).

The material has been provided by InstaForex Company - www.instaforex.com