The USD/JPY turned to the downside in the short term and it seems poised to develop a corrective phase. After its strong growth, the price action signaled exhausted buyers, so a short term downside movement is natural. It was located at 136.14 at the time of writing, far below yesterday's high of 137.10.
In the early morning, the Japanese unemployment rate came in at 2.4% versus 2.5% expected, while Tokyo Core CPI rose by 3.3% matching expectations. On the other hand, the US data came in better than expected earlier, that's why the USD/JPY pair rebounded a little. Still, it seems that the pair is overbought, so we cannot exclude a new sell-off.
USD/JPY sellers could be in control soon
As you can see on the h1 chart, the USD/JPY dropped below the uptrend line and under the median line (ml) of the ascending pitchfork, signaling that the swing higher could be over. Now, it has retested the median line (ml) but it has failed to reach and retest 136.51 - 136.91 zone signaling downside pressure.
Today's low of 135.80 stands as a critical downside obstacle. Technically, after its sell-off, a rebound was natural. The rate could test and retest the immediate resistance levels before going down.
USD/JPY outlook
False breakouts above the immediate resistance levels followed by a bearish closure below 135.80 activates more declines. This is seen as a selling opportunity.
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