USD/JPY trades lower at 108.72 versus 109.23 today's high. The pair reached a new upside target, obstacle, and not it drops naturally after registering an amazing growth lately. USDX's current sell-off forces the pair to decline in the short-term.
Still, the current retreat could be only a temporary one. USD/JPY could come back to test and retest the near-term downside obstacles before resuming its swing higher. Technically, a minor decrease was somehow expected.
USD/JPY drops only because the US Dollar Index plunges at the time of writing. Positive inflation data reported by the US tomorrow could boost the USDX again.
USD/JPY Reached A New Target!
USD/JPY reached the R1 (109.21) and it was almost to hit the ascending pitchfork's upper median line (UML). A temporary drop was somehow expected from around these levels after the major leg higher.
The pair could drop as much as 108.15 static support or lower to reach and retest the Pivot Point (107.79) level. A false breakdown with great separation through these levels could announce a new bullish momentum. The current retreat could help the buyers to go long again.
Forecast!
Selling here is risky as USD/JPY could increase again anytime. So, maybe you should wait for the current retreat to end and then go long again.
Also, we'll have a buying opportunity if USD/JPY jumps and closes above the R1 (109.21) and above the ascending pitchfork's upper median line (UML). A new bullish momentum aims at 110.00 and at the R2 (110.06).
