Today (4/15) we saw manufacturing data out of the US, and they disappointed, sending the USD lower across the board. Let's take a look at the data set and the reaction in USD/JPY as well as the technical implications. Empire State Manufacturing Index (Apr.): -1.2Forecast: 7.2Previous: 6.9This shows that in the past month, manufacturing has been shrinking in NY, which surprised because the forecast actually looked for an improvement on the March print. Capacity Utilization Rate (Mar.): 78.4%Forecast: 78.7Previous: 79.0This shows that manufacturers are using less capacity, which reflects a declining expectation for orders. Industrial Production m/m (Mar.): -0.6%Forecast: -0.3%Previous: 0.1%(click to enlarge; source: forexfactory.com) So far in 2015, US economic data has been worse than what the FOMC projected, not only in manufacturing as we saw today, but also in retail sales. Inflation data has softened as well. This trend has already made it highly improbable that the interest rate hike will be in mid-year, and pushes expectations to year's end. The market has been pricing in a rate hike throughout 2014, but have become cautious about buying more USD. Let's take USD/JPY as an example. USD/JPY 4H Chart 4/15(click to enlarge) In the 4H chart, we can see that traders are fading USD/JPY after today's weak data. The pair fell below a rising channel that started in Late March from around 118.30. Now, price is poised to test that low, with risk of extending lower in the short-term. USD/JPY Daily Chart 4/15(click to enlarge) The daily chart shows that price is essentially heading towards the "central pivot" of the multi-month consolidation range since December between 115.56 and 122. If price crosses below the 118 line, pressure will fall towards the 115.56-116 support area. This is still a short-term bearish outlook in a medium-term neutral mode, and in an intact uptrend in the long-term since 2011/2012. A bounce off of the 115.56-116 area still keeps the outlook of USD/JPY bullish-neutral for Q2, 2015. Now, if price falls below 115.50, then we have topping, and a possible bearish outlook in the medium-term, but because the long-term trend is still bullish, we should limit the outlook to the psychological level of 110, which is also a previous resistance area from Oct. 2014.