USD/JPY breakdown in play March 17, 2017

The USD/JPY has plunged today and has  reached new lows, has fallen much below the 112.90 yesterday’s low. Has resumed the bearish momentum and looks determined to hit new lows in the coming days because seems too heavy to be stopped on the Daily chart. The USD is going down as the USDX is expected to resume the bearish momentum, the index has rebounded a little today, but the gains are vanishing.

A USDX’s will force the greenback to drop much deeper versus its rivals, is still under massive selling pressure, could approach the 99.84 static support in the fresh start of the upcoming week. The currency pair was dragged down by the Yen, which has become strongly bullish again, the Japanese currency has increased significantly also versus the Pound and versus the Euro, not only against the greenback.

The Yen has increased as the Nikkei stock index has decreased further, the index is going down again after the false breakout above the 19700 major static resistance. The Nikkei continues to move sideways on the Daily chart, could decrease further on the short term and could send the Yen much higher versus its major rivals. The Yen continues to increase even if the BOJ has maintained the interest rate steady at -0.10%.

The rate is challenging the third warning line (wl3) of the former ascending pitchfork, a valid breakdown will attract even more sellers, which will drive the rate towards the 38.2% retracement level. Should drop further after another false breakout above the second warning line (WL2) of the major descending pitchfork, most likely will take out the static support from the 38.2% retracement level.

You can see that is moving somehow sideways on the short term, but a breakdown below the 38.2% retracement level will open the door for more declines, could approach the first warning line (WL1) of the major descending pitchfork in the coming weeks if the USDX and the Nikkei will drop deeper.

The medium term upside movement will resume only if the price will make a valid breakout above the second warning line (WL2) of the major descending pitchfork.

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