The currency pair dropped and resumed the Friday’s bearish candle. It could drop further in the upcoming days after the Friday’s false breakout. Price is trading in the red even if the JP225 stays higher and is trading in the green. The Nikkei moves somehow sideways on the daily chart, but maintains a bullish perspective, a further increase will force the Yen to decrease versus its rivals.

However, you should know that the perspective remains bullish on the Daily chart because is located much above a very important dynamic support.

The Yen increased today, even if the Japanese data have disappointed in the early morning, the Prelim Machine Tool Orders were reported at 46.9%, lower versus the 49.8% in the former reading period, the M2 Money Stock increased only by 4.0%, less versus the 4.1% estimate and compared to the 4.1% growth in the former reading period, while the BSI Manufacturing Index increased from 9.4 to 9.7 points, but failed to reach the 10.1 estimate.

Will be very important to see what will really happen on the Nikkei in the upcoming days, a breakout above a dynamic resistance seems imminent on the short term.

Price dropped after the false breakout above the 150% Fibonacci line (ascending dotted line) and above the 152.83 level. GBP/JPY failed to close near the confluence formed between the mentioned levels, signaling that it could drop on the short term.

A further increase will come only after a valid breakout above the 152.83 level, while a selling one if it will make a valid breakdown below the first warning line (WL1) of the ascending pitchfork. I believe that only a Nikkei’s larger drop will force the currency pair to start a large drop on the short term.

Right now will be better o stay away from this pair because we don’t have any trading opportunity, but I hope that we’ll have one very soon as the rate should escape from the minor range.