The USD/JPY dropped and seems poised to hit new lows in the upcoming days after several false breakouts above some important resistance levels. Price is strongly bearish and looks unstoppable right now as the Nikkei stock index has dropped and erased the morning gains. Price developed a minor Rising Wedge pattern and now we may have a valid breakdown which will confirm a further drop. The greenback is losing ground versus its rivals as the dollar index dropped and resumed the yesterday’s minor bearish candle. I’ve said in the previous articles that the USDX could move sideways on the short term because it may need to capture more directional energy before will climb much higher.

The Yen increased on the mixed Japanese data, the Economy Watchers Sentiment increased unexpectedly, from 51.3 to 52, even if the traders have expected to see a drop to 50.7 points. The Current Account disappointed because has dropped from 2.27T to 1.84T in September, more versus the 2.05T estimate, while the Core Machinery Orders plunged by 8.1% in September, more compared to the 1.8% drop in the former reading period. The Bank Lending increased only by 2.8%, less compared to the 3.0% estimate and versus the 2.9% growth in the former reporting period.

The price dropped and reached new lows today, it could approach the 250% Fibonacci line in the upcoming days, I want to remind you that the rate will take out the support from the 250% line if will reach it. You can see that the rate has developed a Rising Wedge pattern and now should drop on the short term. Technically, it should drop towards the lower median line (lml) of the ascending pitchfork, but this scenario will take shape only if the Nikkei stock index will start a corrective phase. It could drop also towards the third warning line (WL3)  in the upcoming weeks, but this scenario will take shape only if the Federal Reserve will disappoint in the upcoming meeting and will delay the rate hike again.