USD/JPY should climb higher December 08, 2016

The price has managed to increase today and could increase further after the USDX rally, the index has erased the earlier massive losses and now looks determined to hit new highs. The USDX has climbed again above the 101.00 psychological level and could approach the previous highs in the coming period if the FED will hike the Federal Funds Rate, the index has maintained a bullish perspective despite the minor retreat, the correction was expected after the impressive bullish momentum. Technically the US dollar index is expected to increase further because the correction phase was stoped by a strong dynamic support.
The rate has increased on mixed Japanese and US economic data, the Japanese Economy Watchers Sentiment surged from 46.2 to 48.6 points, exceeding the 45.6 estimate, has reached the highest level after January 2016, but unfortunately remains in the negative territory. Moreover the Current Account has increased from 1.48T to 1.93T in October, beating the 1.57T estimate, the Yen wasn’t impressed by the positive data and has depreciated again versus the greenback. The Yen has taken a hit from the Final GDP indicator, which has increased only by 0.3%, less than the 0.6% estimate, has increased also less versus the 0.5% growth from the previous reading period, while the Final GDP Price Index has dropped by 0.2%, more versus the -0.1% forecasts, the Bank Lending rose by 2.4%, matching expectations, actually has remained steady at 2.4% for the second month in November.
The USD has rallied after the ECB Press Conference, the dovish speech has brought life on the currency market, the greenback has taken the lead and dominates the currency market again. The United States Unemployment Claims have dropped from 268K to 258K in the previous week, matching expectations.

USDJPYd

The price has managed to climb again above the 23.6% retracement level and could increase further if will consolidate a little above this horizontal obstacle, maybe will move sideways to retest the median line (ml) of the ascending pitchfork before will climb much higher. I want to remind you that the perspective remains bullish on the short term as long as the rate is trading above the median line of the minor ascending pitchfork, the neat term resistance is at the upper median line (uml) of the ascending pitchfork. Is expected to increase further after the breakout above the first warning line (WL1) of the major descending pitchfork, personally I’m waiting for an accumulation movement because the price needs to recapture more directional energy if he wants to reach new highs.

USDJPYh

You can see on the H4 chart that the rate is moving sideways after the failure to close above the upper median line (uml) of the ascending pitchfork, could increase further because wasn’t attracted by the confluence area formed at the intersection between the first warning line WL1 with the median line (ml) of the ascending pitchfork, we’ll have a great buying opportunity if the rate will test the confluence area formed at the intersection between the 23.6% retracement level with the median line (ml).

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