The EUR/JPY goes down as the Nikkei drops sharply as well. I’ve said in the last days that the Yen could increase versus all its rivals if the JP225 index will fail to breakout above a very strong dynamic resistance.

The Nikkei is trading in the red and resumes the bearish momentum, it could hit fresh new lows in the upcoming hours, so the Yen could appreciate much more. EUR/JPY move sideways on the short term, but I really hope that we’ll have a clear direction very soon and a fresh trading signal. Technically, it was somehow expected to drop further after the failure to make new highs and after the failure to reach and retest some very important resistance levels.

It has shown exhaustion signs, but is still located above a very important dynamic support, so we still need a confirmation that will start a larger drop.

The Yen received a helping hand from the Flash Manufacturing PMI, which it was reported at 54.2 points, much above the 53.6 estimate, the Revised Industrial Production rose by 0.5%, matching expectations and the 0.5% growth in the former reading period.

The Euro dropped versus all its rivals in the last hours, even if the ECB maintained the Minimum Bid Rate on hold at 0.00%.

The EUR/JPY drop after the failure to reach and retest the sliding  line (SL1) of the major red ascending pitchfork. It is attracted by the upper median line (UML) of the ascending pitchfork, but only a valid breakdown below this line will confirm a larger drop, at least till the lower median line (lml) of the blue ascending pitchfork.

Technically, it should drop after the failure to retest the median line (ml) of the blue ascending pitchfork and the 150% Fibonacci line. I really hope that we’ll have a significant move after will escape from the minor extended sideways movement, you should keep an eye on this because we may have a great trading opportunity.