USD/JPY is trading in the green and seems poised to approach and reach fresh new highs as the Yen is punished by the Nikkei’s upside movement. The pair could be attracted by a confluence area in the upcoming hours or 1-2 days, it depends also what will happen on the USDX.

The dollar index has rebounded, but this could be only a temporary rebound and the index could resume the corrective phase. However, the JP225 index has managed to increase today and could try to reach new highs in the upcoming days.

Nikkei has managed to stay above the upside 50% Fibonacci line of the minor ascending pitchfork. It has failed to close the last two gaps up signaling that we may have a further increase. It approaches the 24129.3 level, which represents a very strong and crucial resistance level. We have an important upside target also at the upper median line of the minor ascending pitchfork. So, a further increase will force the Yen to drop further versus all its rivals and not only against the USD. Only a failure to stay above the broken 50% line will announce a potential drop.

USD/JPY has slipped lower in the last and has erased the morning gains. However, the perspective remains bullish as long as the rate stays above the median line (ML) of the major ascending pitchfork. It could still be attracted by the confluence area formed between the 150% Fibonacci line with the inside sliding line (SL). You should know that only a valid breakout above these lines or through the confluence area will confirm a further increase.

A failure to reach the mentioned upside obstacles followed by an important drop could signal a valid breakdown below the median line (ML) of the ascending pitchfork and a potential corrective phase.