USD/JPY technical analysis.
Chatter about a correction in USD/JPY has been mounting but last week we saw another push to the downside that was snapped up before it had a chance to break the previous low.
Technical analysis can be complicated but ultimately when there are buyers waiting before an old low is retested, that's as good as it gets.
USDJPY daily
Late last year the pair corrected close to 115 and then it was retested early in January to create a double bottom. In an early March rally, it wasn't able to break above 121.84 but it wasn't outright rejected.
With US yields high (and a soft bond auction last week), the scope for US inflows is as strong as ever. It just looks like this pair needed a bit more time.
The key will be US economic data. The Fed is preaching that a rate hike will come by the end of Sept but the market is thinking December. If economic data begins to turn higher, the market will fall into line with the Fed and USD/JPY will break to 1.22 and higher.
