There has been a relative “silence” to the Yen that leaves me on edge. Pairs like AUDJPY and NZDJPY have moved higher since the May 17th landslide, but the safe haven Yen has been pretty much asleep since last week’s surge. Quiet times like this often leads to an increase in volatility and the longer a pair like GBPJPY moves sideways and consolidates the more volatile the ensuing breakout tends to be.
Which way will it break is the big question and I don’t know for certain, but the fact that buyers have failed to test 145.70 resistance after 5 trading days tells me there is some underlying weakness in the pair. The pair is consolidating in a 200p range and it will be important to wait for a close below 143.70 or above resistance before taking a trade to prevent getting ‘whipsawed” by the pair and the choppy price action.
A H4 close below 143.70 would open up to 141.85 and a close back above 145.70 would be a sign of strength.