The USD/JPY has edged higher today and has reached fresh new highs
on the short term, the price has finally managed to break above a major dynamic
resistance, the price needs to consolidate the latest gains before will resume
the upward movement. The currency pair has increased somehow unexpectedly because
the US dollar index has decreased a little in the fresh start of this week, the
index has retreated after the impressive bullish run from Friday. The greenback
remains bullish as the USDX is expected to increase further in the coming
period, the index has reached new highs today and have pushed the USD much
higher versus some of its rivals.

The Yen was punished by the poor economic data today, the Japanese
Retail Sales have decreased by 0.8% in April, has decreased less compared to
the -1.2% estimate, and less than the 1.0% drop from March. The dollar has
decreased a little today, but I want to remind you that the United States banks
are closed in observance of Memorial Day. The USD could increase sharply in the
coming period if the Federal Reserve will increase the interest rate in June or
July, we’ll have an interesting summer because the ECB could take action again,
while the Brexit referendum could shake the markets.

The Yen could take another hit from the Japanese economic data, the
numbers could come worse than the predictions, the USD/JPY pair have become
strongly bullish because has managed to jump above a strong confluence area.

The price has become strongly bullish because has jumped above the
confluence area formed at the intersection of the median line of the descending
pitchfork with the minor median line of the short ascending pitchfork.  The price is expected to increase further if
will stay above the minor median line (ml), the pair has finally jumped above
the median line of the descending pitchfork, which has represented a strong dynamic
resistance, has also jumped above the minor median line and now is now expected
to increase to the 23.6% retracement level, is expected also to reach the upper
median line (UML) of the descending pitchfork, but also the minor upper median
line (uml). Remains to see where the price will find strong resistance, the
sentiment will change significantly only when the price will escape from the
medium term descending pitchfork, I want to remind you that the outlook remains
bullish as long as the price is trading inside the ascending pitchfork’s body.

Personally, I’m expecting the price to come down to retest the
median line of the short ascending pitchfork before will resume the upward movement,
if this scenario will take shape, the we’ll have a good opportunity to go long
on this pair on the short term.

You can see on the H4 chart that the bullish momentum was paused for
the moment and we could see a short retreat in the coming hours, the pair could
retest the minor median line (ml), or could drop even to retest the sliding
parallel line and the median line (ML) of the descending pitchfork.   

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