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USD/JPY - False Bullish Breakout Leads to Bearish Breakout

Yesterday, the USD/JPY broke above a mini consolidation, which had resistance at 108.55, and broke above this week's falling trendline. This was an early bullish continuation signal, but as I noted in the previous USD/JPY post, a hold below 109 still has pressure on the 107.75-108 lows. The market faded USD/JPY's bullish breakout and the pair fell sharply.

USD/JPY 1H Chart 10/9(click to enlarge)

Note that price only briefly breached the 50-hour SMA and is not under all 3 SMAs. The RSI briefly cracked 60, but has held below it for the most part. This shows maintenance of this week's bearish momentum. 

After the false bullish breakout, price fell cleanly below the 107.75-108.00 support area, signaling a bearish breakout.

The 107 handle might provide some support in the near-term. It is a common price USD/JPY consolidated around in mid-September. If USD/JPY does find buyers around 107, let's see what kind of pullback we get. If the pullback still respects the double top formed in the recent weeks, then we have the 105.44, previous 2014-high broken in September, in sight.