USD/JPY tries to break out on Friday, but rolls over

The US dollar initially tried to rally during the trading session on Friday, as the 107.50 level offered a bit too much in the way of resistance. The jobs number came out and that of course had a lot to do with what happens next, but I think that we are going to stay in the consolidation area, and I think that the 107.50 level will continue to be difficult to break out above, just as the 105-level underneath is support. The uptrend line slicing through their of course also offers support, so I think that we are going to stay in consolidation in the short term.

At this point, I think that the pullback is going to be a nice buying opportunity for value hunters, as I do think that were going to eventually build up enough momentum to break out. It’s going to take a handful of attempts the breakout I believe, and I think it’s only a matter of time before that happens. Once it does, I would not only be long of this market, but I would start to add somewhat aggressively. The alternate scenario of course is that we pull back towards the 105 handle, an area that is massive support. If we were to break down below there, that would be a very bearish market just waiting to happen, and I would be heavily short of this market, reaching down to the 101 level.