FXStreet (Barcelona) - Tim Riddell, Head of Global Markets Research, Asia at ANZ, believes the pair would be carving an important base.
"The proposition that USD/JPY is consolidating through time rather than price is gaining more credence. Momentum indicators, especially weekly RSIs, remain painfully neutral, but a solid base appears to have formed."
"The 100.75 area has held solid and thus pushed back the risk of a corrective flush (towards cloud support in the 98.70-99.65 area). However, the 104.00 area remains critical. A weekly close above 104.15 would boost upside potential."
"The frustratingly narrow range at present does not alter the underlying theme, as indicated above. The USD uptrend should resume at some point and allow for an eventual surge through 105.50-00 towards the 111.50-112.00 area."
"The solid support found at 100.70-00 and a sound turn in daily momentum into June are providing USD with renewed upside potential, and this suggests that the 104.00-15 area should be retested relatively soon."
"Interim resistance at 103.10 may confound the current bias for an early retest of 104.10-15, but a close below 101.85 is needed to force a continuation of the consolidation pattern (could even initiate another down -leg)."
"Despite the remaining concerns over the consolidation pattern continuing, the recent rebounds are encouraging. As noted in the weekly slide, a close above 104.15 should trigger a retest of 105.50-60, with larger gains for H2 2014."