The USD/JPY increased and resumed the yesterday’s bullish movement. It seems determined to reach a major dynamic resistance. We’ll see what will happen when the rate will hit this line because we may have a rejection if the USDX and the Nikkei stock index will drop again.

The dollar index has increased a little today but failed to reach the 89.98 yesterday’s high. Technically, the USDX remains under selling pressure on the short term, so a further drop will ruin the USD. On the other hand, the JP225 index has managed to jump above a very important resistance level but has shown some exhaustion signs.

The Yen will take the lead and will dominate the currency market only if the Nikkei stock index will drop sharply again. Right now is premature to talk about a significant drop on the JP225 because the rate is still located above very important support levels.

The Prelim UoM Consumer Sentiment was reported at 97.8 points, much below the 100.6 estimate and versus the 101.4 in the former reading period, the JOLTS Job Openings dropped from 6.23M to 6.05M, much below the 6.11M estimate. Moreover, the Prelim UoM Inflation Expectations increased by 2.7%, less versus the 2.8% in the former reading period.

The rate could reach the fourth warning line (WL4) of the former descending pitchfork and only a valid breakout above this line will signal and confirm a further increase. A selling opportunity will appear if the rate will make a valid breakdown below the second warning line (wl2) of the former ascending pitchfork.

You can go long on this pair if the rate will stabilize above the WL4 and if it will stay away from the wl2 of the ascending pitchfork. This scenario will take shape only if the Nikkei will continue to move higher.