The rate has jumped higher on the short term after the failure to reach a major dynamic support. Price has shown some exhaustion signs on the short term only because the Nikkei and USDX downside movements were stopped.

It remains to see how long will be this rebound, it could be attracted only by a dynamic resistance and then will drop again. I’ve said in the previous days that the rate could rebound if will fail to reach the near-term support levels. The scenario has taken shape but is premature to talk about a larger rebound at this moment because the USDX is still under massive selling pressure.

The USD increased significantly today also because the United States data have come in better in the yesterday’s trading session. The greenback needs a bullish spark, it remains to see how will react later after the US data will be sent to the public. The Unemployment Rate is expected to remain steady at 4.1% for the fourth month in January, the Non-Farm Employment Change may increase from 148K to 181K, while the Average Hourly Earnings could increase only by 0.2% in the previous month, less versus the 0.3% growth in December.

Price rebounded after the failure to reach the 350% Fibonacci line (ascending dotted line) and the first warning line (wl1) of ascending pitchfork. It could now be attracted by the fourth warning line (wl4) of the former descending pitchfork, but remains to see it it will have enough energy to make a valid breakout. The failure to reach the warning line (wl1) could send the rate towards the lower median line (lml) of the minor ascending pitchfork.

Personally, I still believe that the price will take out the 350% Fibonacci line if will touch it, a valid breakdown will confirm a further drop.  USD/JPY continues to move in range on the Daily chart, so only  a valid breakout from the extended sideways movement will bring us a great trading opportunity.