With the first data release for the dollar coming out negative this afternoon as well as the Consumer Confidence coming out negative, let us look at updated analysis on USD/JPY.
On the 4-hour time frame we can see that price rejected off of the potential right shoulder area meaning the head and shoulder pattern is still valid. Looking at the fib tool plotted, we can see that price has pushed just above the 61.8 and for further downside movement, the current candle would need close and engulf the previous candle. We could see a push further into the 78.6 region if price closes above the right shoulder area.
Dropping down to the hourly time frame, we can see that the upside momentum has slowed, and we are currently testing the upper end of the right shoulder region.
Be on the look out for monetary policy announcements on Thursday when Fed Chair Powell addresses the nation. Any reintroduction of further monetary policy will be a positive for the US economy. GDP (QoQ) as well as Initial Jobless Claims will also be released on Thursday. In terms of yen news for the rest of the week, Tokyo Core CPI will be released on Friday.
Remember to always stick to your risk management and wait for candle stick confirmation.