USD/JPY formed a Doji last week to show indecision around the cycle highs. And perhaps that can be expected, with the BOJ slowly beginning to make comments about the forex market. Yet a bullish outside / engulfing day formed on Friday to show strong demand around 144.50.
Whilst this paints an upside bias, bulls should be cautious around current levels given the levels of potential resistance nearby. Last week’s VPOC (volume point of control) resides around 146.59 – the level a soft US CPI print triggered an aggressive selloff and has acted as resistance since. Therefore, bulls may want to wait for a pullback before seeking longs at lower prices, such as the 145.55 area near the daily pivot point. If pries rally from the open, I’d prefer to wait to see if resistance holds and produces a pullback before reconsidering longs.