On Monday, I wrote about USDJPY and how the 108.50 level could serve as a hinge for the pair.
As long as USDJPY was above that level on a daily closing basis, it was likely to attract buyers.
But I was never interested in buying the risk-sensitive pair.
The risk assets that the USDJPY tends to track still look weak to me.
Furthermore, notice how the pair stalled out above 108.50 this week.
Prices went nowhere on Tuesday and Wednesday, and now today is trading back below 108.50.
As I mentioned on Monday, key support comes in at 106.80 followed by the 105.50 area.
Now, the latter area at 105.50 is difficult to discern.
To understand why the blue level below is so significant, you have to turn to the monthly time frame.
I wrote about this wedge several weeks ago.
Notice how the USDJPY is still trading within this wedge pattern on a monthly closing basis.
The pattern above will prove critical in the weeks and months ahead in determining the likely path forward for USDJPY.
So, although you could trade the pair now, I think the more appealing opportunity is still weeks away.