USDJPY: Potential retracement to 104.50 if it stalls near 107.20

Despite broad dollar buying, the Yen looks unlikely to see much further upside above 107.20 this week.

With this said, keep an eye on a close either side of 106.65 which provides a longer term bias (2011-2016 32% retracement level). Two consecutive daily closes, or one weekly close above this level would indicate the start of a sustained uptrend in USDJPY.

Look to sell an intraday rally towards 107.20 this week for a potential pullback towards 104.25-50 during next week.

Comment:

Traded 107.49 during the Asia session following a close above the 106.65 pivot and 106.81 prior swing high.

However, on an intraday basis (4H chart) the market appears to be overbought with negative divergence on the momentum oscillators.

The peak may be in for a correction towards the initial target (now slightly higher at 104.63, followed by a test at 102.85 if this breaks.)

Comment:

*SOME AT BOJ ARE SAID TO SEE NEED TO WEIGH POLICY MORE CAREFULLY

Trade closed manually:

Closed earlier 105.72 - Kuroda presentation dismissing 'helicopter money' was from an old meeting in June (not overnight!)

Stepping back from USDJPY to allow the market to form a definitive swing low / high on a daily basis

Trade closed: target reached:

Initial 104.65 target met. It might be wise to cover here ahead of the event if you are still short.