USD/JPY is trading in the red and could resume the corrective phase if it will fail to reach and retest the near-term resistance levels (support turned into resistance). Price has rebounded in yesterday’s trading session, but this could be only a temporary increase and the rate will reach fresh new lows soon.

Price has increased a little as the Nikkei has increased aggressively since yesterday, but you should know that this could be only a temporary rebound and the index could drop further.

I’ve added the Nikkei’s daily chart to show you what are the perspectives and how the Yen could react in the upcoming period.  You can see that it has bounced back after the failure to reach and retest the outside sliding line (SL) of the major descending pitchfork and now has jumped into the minor ascending pitchfork’s body. It has opened with a huge gap up, so a further increase will force the USD/JPY to increase.

Maybe the index will only retest the WL1 and the downside 50% Fibonacci line of the minor ascending pitchfork. A rejection from these levels will send the rate down again and will force the Yen to increase versus all its rivals.

USD/JPY increased aggressively in the last hours and have erased the today’s losses. It could still reach the 150% Fibonacci line which it represents a very strong dynamic resistance. It could also be attracted by the median line (ML) of the major ascending pitchfork. Price rebounded after the failure to approach and reach the upper median line (uml) of the descending pitchfork.

It could only retest the near-term resistance levels before will drop and will resume the downside movement.