Since the beginning of the year the USD/JPY had been failing to rise. Now, after a few trading sessions out of our channel and the poor employment data depicted on Friday its time to recheck supports. As previously mentioned this pair has some good support lines and its defiantly teasing them since the number came out on Friday.
First support to fail was the important 103.93 line; the JPY was very strong during the Asia session and then triggered the next move to 103.32, which currently holds. Next leg down should head the 102.69 support line and to the upside this pair should confirm resistance in the 103.93 and 104.22 lines.
On Thursday we discussed the “Flag Formation” on the 4H charts, and it seems as though we had a false breakout on the upside and then a much stronger price action on the downside. This is a classic price action, when we see an initial false break followed by strong move to the other direction. As of now the trend is to the downside with supports in 170.62 and 169.82 (same support line from Thursday). This view will change only if the pair will be trade above the uptrend line, which should be above 172.
For the first time since October 2013 the gold is trading above his 50 DAY M/A on the daily chart, and it should stay above the M/A before any significant price correction. For today this 50 day M/A equals 1245, hence we should expect some interesting price action around it. If the gold price will close above the 50 DMA, it will trigger the next leg up with targets around 1272 and 1278 the 100 DMA.