In a previous post USDJPY has provided us with a weak bullish signal when it was trading at 107.55. In that post we mentioned that the bullish signal would strengthen on a break above 108. So far price remains below this important resistance level.
USDJPY is trading above the Ichimoku cloud in the 4 hour chart. Price is now pulling back lower due to worse than expected ISM Manufacturing PMI that was just announced. Bulls need to hold price above the 4 hour cloud in order to continue to hope for a move higher. Resistance is at recent highs at 108. Support by the cloud is at 107.72.
On a daily basis we also have an important cloud break out and back test at cloud support. Price is still above the Daily tenkan-sen (red line indicator) which is now found at 107.70. As long as price is above that level we remain short-term bullish. If that support level fails to hold we should expect price to fall further towards cloud support on a daily basis at 106.90.
