The USD/JPY looks exhausted on the short term and could drop in the coming days as the USDX has failed to take out a major dynamic resistance, the index is losing bullish momentum and could send the USD lower again versus its counterparts.
The pair has increased in the early morning, but the seller’s have taken full control and are leading the price lower, the rate has hit a strong static resistance, but has failed once again to close above this obstacle, has also failed to jump above the last week high from 107.48 level. The Japanese Yen could increase because the Japanese Trade Balance has increased from 0.29T to 0.33T, the surplus has increased much more and has exceeded the 0.24T estimate. However remains to see how the price will react tomorrow after the United States will release the economic data, the CB Consumer Confidence could drop from 98.0 to 95.6 points, while the Richmond Manufactuirng Index may increase a little from -7 to -4 points, a major disappointment could harm the USD, on the other hand the greenback could receive a helping hand from the New Home Sales which could increase from 551K to 560K, moreover the US Flash Services PMI is also expected to drop from 51.4 to 51.2 points, signaling that the service sector expansion could slow down.
The Japanese SSPI economic indicator could increase by 0.1%, less compared to the 0.2% in the previous reading period.

The price has found strong resistance right below the median line (ML) of the medium term descending pitchfork, the rate has failed to close above the 38.2% retracement level and now could drop on the short term again. The rate is somehow expected to drop on the short term because has failed to retest the median line of the medium term descending pitchfork, the rate could drop sharply if the price will stay below the median line too long, the sentiment could change significantly only if the rate will jump much above the 38.2% retracement level and above the median line of the descending pitchfork. The USDX has failed to pass above a major descending trend line and now could decrease on the short term, a retreat was somehow expected after the impressive bullish run.

The rate has failed to stay above the median line of the minor ascending pitchfork, has fallen below this level, has retested the minor median line (ml) and now could drop to reach and retest the lower median line of the short pitchfork, any drop below the lml will open the door for ore declines, the rate could decrease toward the lower median line of the medium term descending pitchfork, however the medium term correction phase could be over if the rate will have enough energy to stay above the 50% retracement level.

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Olimpiu Tuns

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