The USD/JPY rallied aggressively and resumed the Monday’s rebound. It moves higher again as the USDX has managed to resume the yesterday’s impressive bounce back and because the Nikkei stock index has climbed higher and is almost to reach the 21346 yesterday’s high.

The JP225 was rejected by a major confluence area and now could be attracted by a dynamic resistance in the upcoming days. The Yen will drop further if the Nikkei will increase further.

The USDX reached new highs even if the United States data have come in mixed, the Final GDP and the Pending Home Sales have boosted the USD.

The JP225 has found strong support at the confluence area formed between the 20320 static support with the lower median line (lml) of the descending pitchfork and now is somehow expected to approach and reach the median line (ml).

You can see that the USDX has rallied in the yesterday’s trading session and now could stabilize above the first warning line (wl1) of the minor ascending pitchfork. The failure to reach and retest the lower median line (LML) of the major blue ascending pitchfork could send the rate towards the median line (ml) of the major black descending pitchfork. A valid breakout above the mentioned resistance could send the rate towards the median line (ML) of the major blue ascending pitchfork.

You can see that the rate has jumped above the 450% Fibonacci line (descending dotted line) and above the 38.2% level. I’ve said in the previous days that we may have a significant upside movement if the rate will jump and will stabilize above the 38.2% level.

However, the rate remains under selling pressure as long as it is trapped below the fourth warning line (WL4) of the major descending pitchfork. A larger drop will be confirmed only after a valid breakdown second warning line (wl2).