Since last week USDJPY can not get out from consolidation stretched between support of 108.70 and resistance of 109.70. On Friday morning demand is again trying to break the resistance, but at the moment of writing this post all attempts are unsuccessful.
When observing H4 chart interval, it can be seen that situation of demand in long term is difficult. Since first half of July, USDJPY has fallen, and the attempt to change the trend in the first half of August has ended with a drop to the lows of last months.
A positive aspect of current situation is the consolidation itself. Very often the trend is changing just after breaking out from consolidation, which follows the sell-off wave. However, it will be necessary to break the upper limit of the current consolidation. Possible breaking of the lower limit will kill the current buyer’s chance.
It is therefore worthwhile to follow carefully in which direction the strike will go. It can set the direction of the USDJPY move for many weeks.