USD/JPY Above Crucial Resistance
The USD/JPY opened with a gap up and reached fresh new highs today. Was strongly bullish as the Yen was punished by the Nikkei’s impressive jump, the index opened with a gap up as well and touched new highs.
The JP225 continues the upside movement, technically should approach and reach new highs if will stay above the morning gap. A Nikkei’s minor drop will be confirmed only if the index will drop and will close today’s gap up.
Personally, I still believe that the Nikkei will decrease a little to correct after the amazing rally, the USD/JPY has already lost altitude after the morning bullish momentum. The USD was expected to increase versus its rivals as the after the last days’ very good US data, the USDX climbed above the 93.81 horizontal resistance, but remains to see if will have enough energy to make a valid breakout.
The USD/JPY edged higher and jumped above the 23.6% retracement level, but failed to stay there and now could retest the median line (ml) of the minor ascending pitchfork. A valid breakout above the median line (ml) will signal a further increase on the Daily chart . The bullish movement was expected after the failure to reach and retest the 38.2% retracement level, but only a valid breakout from the extended sideways pattern will confirm a larger increase, while a false breakout above the median line (ml) will send the rate tumbling.
EUR/USD opened with a gap down as well and looks determined to resume the bearish momentum as the USDX is trading in the green. Price is almost to reach the median line (ml) of the minor blue descending pitchfork, where could find temporary support again. Technically is somehow expected to drop much deeper after the failure to retest the median line (ml) of the ascending pitchfork, the next downside should be at the lower median line (lml) of the minor ascending pitchfork. A valid breakdown below the 1.1711 and below the median line (ML) of the major ascending pitchfork will confirm the Head and Shoulders pattern.
Price increased in the morning, but failed to reach and retest the 250% Fibonacci line. Technically is should drop further on the short term after the failure to stabilize above the 250% level. It could come down to retest the SL of the major descending pitchfork and could move in range on the short term before we’ll see what will happen on the USDX.
By Olimpiu Tuns – Market Analyst
I graduated a Master in Business Administration, I am a Market Analyst / Trader on Financial Markets (forex, commodities, futures, options) for more than 6 years, I use technical and fundamental analysis for my daily activity. Founder and Market Analyst at ovtbusiness.com (Financial Markets Blog) and contributor on investing.com, actionforex.com, countingpips.com, forexalchemy.com, etc.
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