USD/JPY: Bearish scenario After Pullback Resistance Area SHORT

The Japanese yen is weighed down by the weaker domestic data, showing an unexpected current account deficit and an economic contraction during the third quarter.
The intraday uptick, however, lacks bullish conviction and runs out of steam near the 137.25 zone amid subdued US Dollar demand. Expectations that the Fed will slow the pace of its policy tightening cycle keep the USD bulls on the defensive and cap the upside for the USD/JPY pair. That said, the incoming positive US macro data has been fueling speculation that the Fed might lift rates more than recently projected.

This, in turn, holds back traders from placing aggressive bets around the USD/JPY pair and leads to range-bound price action. Hence, the focus will remain glued to the upcoming FOMC policy meeting on December 13–14. As the key central bank event risk approaches, investors will be confronted with the release of the most recent US consumer inflation figures, which will influence the Fed's policy outlook and drive USD demand.

Today traders will take cues from the release of the usual weekly initial jobless claims data from the US, due later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will be looked upon for short-term trading opportunities around the USD/JPY pair.

Technical overview:

Today's price is near 137.25, where it appears that the price is rejecting the increase in value after a solid rejection on the resistance area drawn in confluence with the 61.8% Fibo. In overbought levels with divergence, the dynamic trendline gives a bearish signal, as does the stochastic indicator. 

Comment: