The currency pair increased sharply today and reached fresh new highs as the Yen was punished by the Nikkei’s further increase and because the USD is supported by the USDX’s rally. The dollar index resumed the upside momentum and reached the 93.81 static resistance again. Is very important to see what will really happen on the USDX because another rejection from here or a false breakout will send the rate down again and will force the USD to drop versus its rivals on the short term.
The USDX needs a bullish spark to be able to climb above the 93.81 static resistance. The US Building Permits are expected to drop from 1.27M to 1.25M, while the Housing Starts could remain the same at 1.18M. The Federal Budget Balance and the Beige Book will be released as well, but I don’t think that will have any impact.
Price increased after the yesterday’s indecision and climbed above the 112.80 level. The next upside target will be at the median line (ml) of the minor blue ascending pitchfork. Technically, it should climb much higher after the failure to retest the 38.2% retracement level and after the today’s aggressive rally.
USD/JPY moves in range on the Daily chart, is trapped between the 23.6% retracement level and the 108.12 level, only a valid breakout will bring us a clear direction.
