The currency pair rallied aggressively and has managed to pass above some very important upside obstacles. USD/JPY increased after the minor drop as the USDX and the Nikkei have increased as well. The USD has taken the lead as the USDX has edged higher and has reached new highs.

I’ve said in the previous article that the Yen will increase and will dominate the currency market only if the Nikkei stock index will drop significantly.

I’ve told you in the previous week that we still need a confirmation that the pair will resume the minor correction.

The Yen dropped today as the Japanese data failed to save it from the downside. The Core Machinery Orders dropped by 3.9% in March, more versus the 2.9% estimate and versus a 2.1% growth in the former reading period.

The USD continues to stay higher versus the Yen even if the US Unemployment Claims have increased from 211K to 222K in the previous week, beating the 216K estimate. The Philly Fed Manufacturing Index rose from 23.2 points to 34.4 points exceeding the 21.1 estimate, while the CB Lending Index surged by 0.4%, matching expectations and the 0.4% growth in the former reading period.

The USD/JPY has escaped from the minor ascending pitchfork and seems determined to climb towards the first warning line (wl1) of the ascending pitchfork and towards the fifth warning line (WL5) of the former descending pitchfork.

Actually, it could be attracted by the confluence area formed between the mentioned resistance line if the Nikkei and the USDX will rally in the upcoming days.

Personally, I believe that the rate will turn to the downside only if the fundamental factors will take the lead on the short term. The perspective will remain bullish on the daily chart as long as the rate will stay above the ascending pitchfork’s body.