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The USDJPY is testing key resistance at 108.70 this week.
I wrote about this level in the June 2nd weekly forecast. You can see where 108.70 served as a pivot back in January and early February.
As long as this level holds as resistance on a daily closing basis, the USDJPY will remain under pressure.
However, I’m not ready to short USDJPY just yet.
One thing I don’t like is the way the pair has been grinding higher since the June low at 107.80.
I don’t like to see that much price action to the immediate left of a retest.
That doesn’t mean USDJPY won’t sell off from here, but it does mean that I’m in no rush to go short.
I’m okay giving this one some room to see what materializes later this week.
The same goes for other yen pairs as I think we could see more consolidation before the next leg materializes.
Key support for USDJPY comes in at the January 3rd close near 107.60.
Alternatively, a daily close above 108.70 would expose the May lows at 109.15.
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