The USD/JPY has changed little today because is waiting for a bullish spark to be able to resume the upside movement, price could move significantly in the afternoon after the US will the release the first economic figures. The rate has decreased  a little as the dollar is weakened by the USDX’s drop, the index has retreated a little in the morning, but now is fighting hard to rebound and to recover.

On the other hand, the Yen has increased as the Nikkei stock index has fallen in the morning after the yesterday’s failure to close above the 19700 major static resistance, the perspective remains bullish, so the index could still jump above the major upside obstacle, this scenario will force the Yen to decrease versus its rivals.

The US data should bring life on the USD/JPY, the CPI is expected to increase by 0.0% in February, less versus the 0.6% growth in January, while the Core CPI is expected to increase by 0.2%, less versus the 0.3% increase in the previous reporting period.

The Retail Sales figures will come out as well later, the Retail Sales indicator may increase by 0.2% in February, less versus the 0.4% growth in January, moreover the Core Retail Sales could increase by 0.1% in the last month.

You can see that the rate hovers right above the second warning line (WL1) of the major descending pitchfork and above the broken 23.6% retracement level, has found temporary resistance at the second warning line (wl2) of the minor ascending pitchfork and now could come down to test and retest the WL1 and the 23.6% level.

A retest of the mentioned support levels (resistance has turned into support) could validate the breakout, personally I would have liked a broader consolidation here before the rate will increase further, but most likely the rate will register a huge movement tonight after the FOMC.

Technically the rate should increase further, but remains to see what the FOMC Press Conference will bring, a disappointment will send the rate tumbling on the short term, so you should be very careful tonight because a high volatility is expected.