The USDJPY pair retested its broken support trend line as resistance early last week forming a strong rejection candle. This leaves the chart in limbo for anyone who is not already short from the rejection at 111.500, awaiting a breakdown of 110.150/110.000 as the next possible short entry on the chart. A drop under this level points to light support at 109.800 followed by the 109.000 level. From there the major swing low at 108.100 comes into focus followed by the 107.000 area.
Resistance for the pair is building at 111.000 and this is the primary hurdle to surpass before 111.500 can be dealt with. A push higher would need to breech the trend line at 111.650 also with a clearance above 112.000 confirming the move. Above this level the area around 113.000 has seen consolidations and rejections in the recent past with the last swing high at 113.185. Continued USD strength may prove enough to lead price to the high at 114.746, but the USD has weakened somewhat of late so a confirmed move is needed.
The chart for USDCHF is showing price consolidating around the 1.0000 level. The price has made three attempts to break higher over the last twelve months and is having difficulty staying above the 1.0040 level with the three attempts forming rising trend line resistance. This now adds to the difficulty of a break higher. From the current level resistance is impacting price action at 0.9985 followed by 1.0000. Above this level 1.0040 comes into play followed by the recent high at 1.0070 with 1.0100 beyond.
With price consolidating and setting higher highs and higher lows the danger is that the chart is forming a topping pattern. If this was to play out light support can be taken at 0.9918 while still consolidating however a breakdown of the rising supportive trend line at 0.9900 could signal a more severe drop is ahead. A loss of this level would mean price is likely to engage with support at 0.9858 and the 0.9791 swing low. Below this point the 0.9710 level becomes key.