USDJPY Analysis: What's Next After the Weak GDP Data from Japan

What's up with USDJPY? Japan's economy contracted sharply in the 3d quarter. GDP declined by 0.8% on a Q/Q basis. This was a substantial decline from the 2d quarter’s growth of 0.5% and slightly lower than the median estimate of -0.8%.

More fundamentals here: https://forexezy.com/usdjpy-forecast-after-the-weak-japan-gdp-data

As the Japanese economy will probably record the slowest recovery among the G7 countries and with the US inflation numbers ahead, here is my technical analysis for the upcoming price action:


The 4H chart shows that the USDJPY has some significant support at the 112.71 level. It has struggled to move below this point after bullish breakout in October. This price is notable since it is slightly below the 38.2% Fibonacci retracement level. It also seems like it is the neckline of a potential head and shoulders pattern that is forming.

Therefore, there is a likelihood that the pair will break out lower in the coming days. If this happens, the pair can test the 50% retracement level at 112.40.