Last week we posted a couple of updates about USD/JPY as this forex pair was flirting with the 110 support level. It became obvious that this level would have to give up sooner or later because the highs kept getting lower.

But at the same time, the buyers were activated every time the price got 20-30 pips close to 110. So, the price action seemed a bit strange, although the bearish bias was imminent, particularly after last Friday´s 140 pip tumble.

The price declined after the US employment report didn´t satisfy the market and it stayed down, closing the week on a very bearish note. That's another sign that this week we´re going to see a break. As predicted, the break happened last night.

The swan dive started when the price failed to break the 100 SMA last Friday

I can´t see any apparent fundamental reason; Japanese cash earnings for this year jumped higher, but that´s supposed to help this pair because it´s a positive indicator for the BOJ (Bank of Japan).

Now, the 110 level will likely switch places and turn into resistance, so I will be looking to sell up there. Although resistance will stretch all the way up to 110.20-30 so we might wait to release a sell forex signal, depending on the price action when it does get up there.