The USD/JPY has dropped sharply today and has resumed the Friday’s bearish candle and now is very close to take out a strong dynamic support. The currency pair has decreased as the USDX has plunged aggressively today, the index has touched new lows and looks determined to approach the 100.00 psychological level, a further drop will push the USD much lower versus its rivals. The USDX continues to trade in the red, has hit a dynamic support level and now remains to see how will react , could drop along this level till will reach the 99.84 static support.

The pair was driven by the technical factors today because we had a very poor economic calendar, the Yen has rallied again as the Nikkei stock index has opened with a gap down and has continued to drop, the index maintains a bearish perspective on the short term after the Friday’s false breakout.

The Yen has increased despite the poor Japanese data, the All Industries Activity rose by 0.3% in November, has come in worse compared to the 0.4% estimate, but has increased significantly after the 0.0% growth from the previous reading period.

You can see that the price has opened with a gap down today and has plunged much below the 23.6% retracement level, right now is pressuring the sliding parallel line (ascending dotted line), which represents a very strong dynamic support, a drop below this level will open the door for more declines.

Could break below this downside obstacle after the failure to close above the 114.81 static resistance and after the failure to climb again inside the minor ascending pitchfork, has come back only to test the lower median line (lml) of the ascending pitchfork before will resume the bearish movement. Technically, is expected to drop further after the false breakout above the second warning line (WL2) of the major descending pitchfork.

Sould drop further after the failure to reach again the second warning line (WL2), the price could find support somewhere at 110.97 – 110.63 or lower at the first warning line (WL1).