USD/JPY dropped in the short term, but the downside seems limited. The price failed to stabilize under the immediate uptrend line signaling that it could start increasing again.
USDX's (DXY) rally forced the greenback to take the lead versus all its rivals. The US Dollar Index could resume its growth only if the US data will come in line with expectations or better today.
On the other hand, the Yen could depreciate if the JP225 (Nikkei) will resume its growth. USD/JPY should drop only if DXY and JP225 will drop.
USD/JPY New Leg Higher!
USD/JPY is traded back above the weekly pivot point (108.99) level after failing to reach the S1 (108.48). The pair is still trapped within a range, a valid breakout from this pattern will really bring us a great trading opportunity.
The pressure remains high as long as it stays below 109.33 high and under the weekly R1 (109.42). Dropping again below the uptrend line and under the weekly pivot may announce a downside movement.
I believe that DXY's (US Dollar Index) drop could send the rate down again. Today's US data could be decisive. The US Prelim GDP is expected to increase by 6.5% versus 6.4% growth in the former reading period.
USD/JPY Trading Tips!
Jumping and stabilizing above the R1 (109.42) is seen as a buying opportunity with a major upside target at the upper median line (uml) of the descending pitchfork.
Dropping under the uptrend line and registering a new lower low, to close below 108.56 will really confirm a selling opportunity.
