The currency pair dropped in the last hours and seems motivated to resume the downside movement. Technically, it is expected to drop further because is located under very important dynamic resistance levels. It remains to see what will really happen in the upcoming hours because we still need a confirmation that it will drop further in the upcoming period.

Price should drop further after the failure to reach and retest some very important dynamic resistance levels. The Yen could take full control versus all its rivals as the Nikkei stock index seems too exhausted to resume the upside movement. The Yen increased after the BOJ even if the BOJ Policy Rate was left unchanged at -0.10%, matching expectations. The Yen received support from the All Industries Activity indicator, which has surged by 1.0%, beating the 0.9% estimate and the 0.3% growth in the former reading period. The BOJ left the monetary policy unchanged, the JP225 is losing altitude and pushes the Yen higher versus all its rivals.

You can see that the Nikkei stock index has come higher but failed to pass above the sliding line (sl2) of the ascending pitchfork signaling a minor exhaustion. I’ve said in the previous week that the will breakdown through the lower median line (LML) of the ascending pitchfork. Only a valid breakout above the sliding parallel line (sl2) will confirm a further increase and a Yen’s drop.

The rate failed to reach and retest the fourth warning line (WL4) of the major descending pitchfork signaling that is still under massive selling pressure on the Daily chart. The next downside target will be at the 350% Fibonacci line (ascending dotted line). It could be attracted by the first warning line (wl1) of the minor ascending pitchfork after the failure to reach and retest the lower median line (lml). A potential upside movement could be confirmed only after a valid breakout above the WL4.