The USD/JPY dropped significantly today and resumed the downside movement. I’ve said in the previous days that the rate is somehow expected to drop further even if the Nikkei stock index has rallied and has reached fresh new highs today. The USD/JPY drop as the USDX is still under selling pressure on the short term.
Technically, the current minor decrease is natural after several false breakouts, but remains to see how long this will be because the USDX is somehow expected to pick up again.
Today could be crucial for the USD, the US data could shake the markets and will have a huge influence on the dollar’s move. The greenback needs a helping hand to take control again and to dominate the currency on the short term.
Price drops further and should hit the 38.2% retracement level very soon. I’ve added a minor red descending pitchfork hoping that I’ll catch a potential downside momentum. You can see that USD/JPY is going down along the upper median line (uml) of the minor descending pitchfork, a retest of this obstacle will announce a breakdown below the 38.2% retracement level. A valid breakout above the mentioned dynamic resistance will signal an increase towards the 23.6% retracement level and towards the median line of the ascending pitchfork. I’ve said in the previous reports that the major downside target will be at the lower median line (lml) of the ascending pitchfork.
