USD/JPY plunges after failing to stabilize above broken upside obstacles. DXY's strong drop weakened the greenback, while JP225's (Nikkei) drop helped the Yen to appreciate versus its rivals.
The pair stands at 109.61 level and it could resume its drop as it's almost to reach downside obstacles. USD/JPY continues to drop even if the US CB Consumer Confidence was reported unexpectedly higher at 129.1 versus 123.9 estimates and 128.9 in the previous reporting period.
The price drops ahead of the FOMC meeting. The FOMC Statement, Federal Funds Rate release and the FOMC Press Conference could really bring sharp movements tomorrow.
USD/JPY Strong Sell-Off!
USD/JPY dropped after failing to stay above the ascending pitchfork's median line (ml). Now is almost to reach the weekly S1 (109.51) and the lower median line (lml) which are seen as downside targets, obstacles.
The pair could be attracted by the confluence area formed at the intersection between these two support levels. The 50% retracement level and the downtrend line are seen as support as well.
Outlook!
A false breakdown with great separation through the support levels, a pin bar, could signal that the decline is over and that the bulls could take the lead again. Staying within the ascending pitchfork's body could bring new long opportunities.
On the other hand, dropping and closing under these levels could activate a larger drop. 109.00 psychological level could be used as a downside target.
