The rate has dropped in the last session and now seems very heavy and poised to approach and reach new lows. Technically, it has shown some exhausting signs and now it is somehow expected to drop further. The USD was punished by the USDX’s drop, while the Yen could be helped by the Nikkei stock index, which could drop on the short term again.
The Nikkei has managed to jump above the median line (ML) of the major ascending pitchfork again, but only a valid breakout above the 150% Fibonacci line of the descending pitchfork it will send the rate much higher.
A failure to stay above the ML could announce a potential drop on the Daily chart. The index seems undecided on the Daily chart. You can see that it has failed to approach and reach and retest the upside and downside 50% Fibonacci lines of the major ascending pitchfork. So, as I’ve said earlier, we may have a further drop only if the rate will stabilize below the ML. A further drop will force the Yen to dominate the currency market.
You can see that the rate has managed to make a breakdown below the lower median line (LML) of the ascending pitchfork and now could drop further. It is very important for the rate to stay below the upside 50% Fibonacci line of the descending pitchfork to be able to drop further. Price has failed to reach the median line (ml) in the last attempts, so another failure to reach it will signal a potential upside movement.
Technically, it could drop much deeper after the failure to stabilize above the upside 50% Fibonacci line and after the failure to approach and reach the upper median line (uml). A valid breakdown below the median line (ml) will confirma broader drop.