Last week run higher leads to sideways consolidation
The USDJPY raced higher last week with a range of about 172 pips. That came after the most narrow trading range since 2012 in the prior week (about 52 pips). Non -trend markets transition to trending markets and that is what happened.
The last 2-3 days is back to the non-trend as the low to high trading range is stuck in a 43 pip trading range with a high at 112.07 and a low at 111.63. That low stalled at a swing low from Friday (see red circles). The high today stalled so far, against a lower high that also has a number of swing levels (see green circles).
At some point the market will crack and run but for now, I would look for the sellers to lean against the 111.98-112.07 area as risk can be defined and limited with stops on a break. Let the spring get a little tighter before breaking.
US stocks are trading above and below unchanged. US yields are higher by about 1.4 to 2.2 bps (not far from earlier levels). Gold – an influence to the dollar (and visa versa) – is trading down $1.00. Not a lot of action there so far.