The currency pair seems undecided on the short term. It’s moving sideways on the short term and needs a spark to be able to start a significant move. USD/JPY is trading in the red right now and is almost to reach the 112.32 yesterday’s low. Technically, it is expected to drop towards new lows as the USD is punished by the USDX’s drop.
The Yen is going up versus the greenback on the short term, even if the Nikkei stock index has rallied in the morning and has reached fresh new highs. The index jumped above the 20756 previous high and reached the 20826 level. The Nikkei is pressuring a dynamic resistance, a valid breakout will confirm a further increase and a Yen’s depreciation.
The Yen increased versus the USD also because the Japanese data have come in better, the Current Account was reported at 2.27T, higher versus the 1.98T estimate and versus the 2.03T in the former reading period, while the Economy Watchers Sentiment increased from 49.7 to 51.3 points, exceeding the 49.9 estimate.
The price decreased and could drop much deeper if the USDX will slide further and if the JP225 will lose altitude. I’ve said in the yesterday’s article that the rate should approach the 38.2% retracement level in the upcoming days after the false breakout above the median line (ml). Price needs to recapture more directional energy to be able to start another bullish momentum.
