Price increased significantly and was almost to reach a significant resistance level, but the bulls look exhausted at this moment. USD/JPY increased as the USDX boosted the USD and the Nikkei has punished the Yen. A USDX and Nikkei’s further increase will force the currency pair to jump much higher.

We’ll see what will happen because the USD/JPY is very close to reach a very strong resistance area, the range resistance could stop the upside again. Technically, it should climb much higher because has failed to approach and reach some very important support levels.

The Yen dropped in the first part of the day as the Japanese data have come in mixed, the Economy Watchers Sentiment increased from 52.2 to 55.1 points in November, beating the 52.1 estimate, the Final GDP rose by 0.6%, beating the 0.4% estimate and the 0.3% growth in the former reading period, while the Current Account was reported at 2.44T, higher versus the 1.93T estimate and compared to the 1.84T estimate.  Unfortunately, the Yen has taken a hit from the Average Cash Earnings, which increased only by 0.6%, less versus the 0.8% estimate and compared to the 0.9% in the former reading period and from the Bank Lending which increased only by 2.7%, less versus the 2.8% estimate. The dollar decreased a little right after the US data was released, the figures have come in mixed.

Price rallied and jumped much above the fourth warning line (WL4) of the descending pitchfork and seems determined to reach the long-term 23.6% retracement level. It could retest the 250% Fibonacci line as well.

You can see that the USD/JPY moves in range on the Daily chart and only a valid breakout above the 23.6% retracement level will signal a further increase. A failure to reach the 114.72 former high will signal that we may have a selling opportunity again. However, it could be attracted by the median line (ml) of the ascending pitchfork after the failure to reach the lower median line (lml).