The GBP/JPY rallied today and has managed to recover after the last week’s drop and stays in the buyer’s territory. Price increased significantly as the Nikkei stock index has increased sharply. The JP225 erased the yesterday’s losses and is almost to reach a very important dynamic resistance where he could find resistance again.

I’ve said in the previous reports that the dollar index maintains a bullish perspective and could still reach fresh new highs. A further increase will force the Yen to drop much deeper versus all its rivals not only against the Cable.

The BOJ has decided to maintain the BOJ Policy Rate unchanged, at 0.10% as expected, the BOJ Press Conference failed to save the Yen from the downside.

The Japanese data have come in mixed today, the Housing Starts dropped by 2.9%, less versus the 3.0% estimate, while the BOJ Core CPI rose by 0.5%, matching expectations. The Prelim Industrial Production dropped only by 1.1%, less versus the 1.5% estimate, the Household Spending dropped by 0.3%, even if the traders have expected to see a 0.7% growth, while the Unemployment Rate remains steady at 2.8%, matching expectations.

The price increased after the retest of the first warning line (WL1) of the major descending pitchfork. Now is pressuring the sliding parallel line (SL) and most likely will approach and reach the lower median line (LML) of the major red ascending pitchfork if the Nikkei will reach new highs.

The failure to drop below the WL1 is signaling that it should climb much higher in the upcoming period, at least till will reach the 152.84 highest high.

Personally, I believe that only a failure to reach the mentioned upside targets will signal an exhaustion and a possible drop in the upcoming period. Is very important to see what will really happen on the Nikkei stock index because technically it could start a minor correction phase after the impressive rally, but remains to see how long the upward movement will be.