The USD/JPY has increased and has resumed the yesterday’s bullish candle, the current rebound is natural as the Nikkei stock index has jumped much higher in the current week. The JP225 has opened with a gap up on Monday, signalling that the buying pressure is high. The index has managed to jump above the 19250 level and could increase even higher on the short term, is attracted by a dynamic resistance, a further increase will force the Yen to drop much deeper versus its rivals.

The Nikkei’s rebound could be only temporary, could retest a broken dynamic support and then will turn to the downside again, remains to see what will happen in the upcoming period because we probably had a false breakdown in the last weeks.

The All Industries Activity rose only by 0.7% in February, less versus the 0.8% estimate, however, the indicator has increased again after the 0.4% drop in the previous reading period. We had a poor economic calendar today, so the dollar won’t be influenced by any economic report today, the US Crude Oil Inventories will be released, but this indicator will have no impact.

The price has edged higher and has touched the 38.2% retracement level and the warning line (WL2) of the major descending pitchfork, we have a strong confluence between these resistance levels, a valid breakout will attract more buyers on the short term. You can see that we have a major resistance area right above the warning line (WL2) of the descending pitchfork, a breakout followed by a consolidation above the WL2 and above the 38.2% retracement level could bring a good buying opportunity.  I’ve drawn an ascending pitchfork to catch a potential upside movement, we’ll have a great buying opportunity if the rate will come down to retest the lower median line of the ascending pitchfork. I would like if the price will come to test the confluence area formed at the intersection between the lower median line (lml) and the warning line (WL2), could be rejected by this area and will start a broader leg higher.