The price has decreased today and has managed to make new lows, has fallen below the 113.74 previous low, but continues to stay above an important support level. The Yen has dragged the price down because the Nikkei stock index has dropped significantly today, the index maintains a bearish perspective on the short term, could reach new lows and could force the Yen to appreciate versus the other major currencies. On the other hand, the greenback has fallen even if the USDX has opened with a gap up in the morning.
The Japanese Yen has increased significantly also versus the Euro, the currency continues to remain strong on the short term, could appreciate further because the JP225 index is somehow expected to drop further.
The Yen has increased on the mixed Japanese data, the PPI indicator has dropped by 1.2%, less versus the -1.4% estimate and less versus the 2.2% drop from the previous reading period, while the Core Machinery Orders have fallen by 5.1%, more compared to the -1.3% forecast.
Moreover the Tertiary Industry Activity rose by 0.2%, matching expectations, while the Prelim Machine Tool Orders has increased by 4.4%.
The rate has fallen below the 23.6% retracement level, but has squeezed a little in the last hours and now is trading above this major downside obstacle. We could have a minor consolidation here while the price will try to reach and retest the first warning line (wl1) of the minor ascending pitchfork, could find support at this dynamic line, we’ll have a larger drop only if the price will take out this support. We’ll have a great selling opportunity if the price will drop below the mentioned support levels, we could go short if the rate will test the confluence area formed at the intersection between the 23.6% retracement level and the warning line (wl1) of the ascending pitchfork, we’ll have to wait for a fresh trading signal because we could still have a bounce back from the mentioned confluence area.
The rate could increase only if the USDX will have enough energy to climb again and if the Nikkei will fail to make new lows.